A N N U A L R E P O R T
A N N U A L R E P O R T
ABOUT GENERAC
• Founded in 1959
• Generac is a total energy solutions company that provides power
generation equipment, energy storage systems, energy management
devices & solutions, and other power products serving the residential,
light commercial, and industrial markets.
• Powering A Smarter World enterprise strategy is focused on improving
energy resilience and independence, optimizing energy efficiency and
consumption, and protecting and building critical infrastructure.
• 2024 Net Sales $4.3 Billion – 57% Residential,
32% Commercial & Industrial, 11% Other
• More than 9,200 employees as of 12/31/2024
• More than 1,200 engineers worldwide
• Doing business in over 150 countries
• Omni Channel Distribution approach with thousands of dealers,
wholesalers, retailers and e-commerce partners
Dear Shareholders,
2024 marked a return to overall growth for Generac with net sales increasing by approximately
7% from the prior year. Strength domestically in our Residential product sales more than offset
expected softness in certain Commercial & Industrial (C&I) and International end markets during
the year. We drove particularly strong growth in shipments of home standby and portable
generators as we rapidly increased production for these products to respond to the robust
demand that resulted from the elevated power outage environment in the second half of the year.
Our teams executed well during the year as we drove nearly 500 basis points of gross margin
improvement with full-year 2024 gross margins approaching 39%, our highest level since 2010.
These factors supported a robust increase in adjusted EBITDA margins while we continued to drive
operating expense investments for future growth, including the development of several important
new products that we expect to launch in 2025.
Strong earnings growth during 2024 coupled with our focused execution on reducing working
capital contributed to record operating cash flow for Generac of $741 million. As a result, we
continued our disciplined and balanced capital allocation approach during 2024 as we prioritized
capital expenditures to drive organic growth opportunities, completed four small acquisitions
to accelerate our Powering A Smarter World enterprise strategy, repaid debt to further improve
balance sheet health, and returned $153 million to shareholders via share repurchases.
New Product Development
We made significant progress in executing our Powering A Smarter World enterprise strategy as
we prioritized several product development initiatives throughout the year. We expect to launch in
the near term new products across our business including our most comprehensive home standby
generator platform update in more than a decade, our next-generation residential energy storage
system, the first Generac-branded residential solar power inverter, and large diesel generators
designed for mission critical backup power applications including data centers.
The breadth of innovation that we continue to bring to the markets we serve is further evidence
of our on-going commitment to the engineering expertise that has been at our core since we
began pioneering backup power markets more than 65 years ago. We believe we are making the
appropriate investments in the capabilities and solutions necessary to capture the future growth
opportunities presented by the mega-trends that support our long-term expectations.
Entrenched Mega-Trends
Our Powering A Smarter World enterprise strategy remains unchanged, but we recently refined
the framing of two mega-trends in particular that support our strategy to focus on the primary
challenges facing electric utility customers – lower power quality and higher power prices. 2024
provided significant evidence of these mega-trends. It was the most active year for power outages
since we began tracking this data in 2010 with nearly 1.5 billion hours lost to outages in the U.S.,
largely driven by three major landed hurricanes in the second half of the year. Severe and volatile
weather patterns have become increasingly common, placing even greater stress on our aging
power grid.
Grid operators and utilities also aggressively raised their future expectations of power demand
throughout the year. The rapid adoption of artificial intelligence and the resulting pace of data
center build out is projected to drive significant incremental demand beyond the established
trends of electrification and re-industrialization in North America. At the same time, power supplies
continue to transition to lower carbon, more intermittent sources thereby creating additional
pressure on reliability. These factors are fundamental drivers of the recent warning from the North
American Electricity Reliability Corporation that significant portions of the U.S. and Canada are at
much greater risk of experiencing power outages due to supply shortfalls over the next five years.
These trends are also impacting the forecasted cost of electricity for end users, with prices
anticipated to grow well beyond the 30% cumulative increase in average U.S. electricity prices that
we’ve experienced since 2020. Massive investments are needed in new generating sources as
well as additional transmission and distribution infrastructure to support the growing demand for
power. The cost of this infrastructure will likely be passed along to ratepayers in the form of higher
electricity prices. Rising power costs and the increasing risk of outages support our expectations
for continued growth in demand for energy management technologies that help home and business
owners reduce electric bills and improve resiliency.
Closing
As concerns about power quality and power prices grow, our enterprise strategy is purposeful
in focusing our efforts to develop new products and solutions that can be deployed as energy
ecosystems that ultimately give homeowners, businesses, and institutions greater control
over the cost and reliability of their electricity. We believe the breadth of our solutions across
power generation, energy storage, and energy monitoring and management is unmatched.
These capabilities combined with our long track record of building, developing, and supporting
distribution as well as engineering, operational, and marketing excellence have Generac uniquely
positioned to create value in the evolution of our electrical grid.
On behalf of the entire Generac team, I would like to thank our shareholders for your ongoing
confidence and support as we look forward to our continued success in the future.
Sincerely,
Aaron P. Jagdfeld
President and Chief Executive Officer
Generac Holdings Inc.
K
FORM 10-K [ 2024 ]
[ THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY. ]
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2024
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
(State or other jurisdiction of incorporation or organization)
20-5654756
(IRS Employer Identification No.)
S45 W29290 Hwy 59, Waukesha, WI
(Address of principal executive offices)
53189
(Zip Code)
(262) 544-4811
(Registrant’s telephone number, including area code)
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
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No ☒
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 has filed a report on and attestation to its management’s assessment of the effectiveness of its
internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm
that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐No ☒
The aggregate market value of the voting common equity held by non-affiliates of the registrant on June 28, 2024, the last business day of the
registrant’s most recently completed second fiscal quarter, was approximately $8 billion based on the closing price reported for such date on the New
York Stock Exchange.
As of February 14, 2025, 59,614,025 shares of the registrant’s common stock were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s Annual Report to Stockholders for the year ended December 31, 2024 furnished to the Securities and Exchange
Commission are incorporated by reference into Part II of this Form 10-K. Portions of the registrant’s Proxy Statement for the 2025 Annual Meeting of
Stockholders (the “2025 Proxy Statement”), which will be filed by the registrant on or prior to 120 days following the end of the registrant’s fiscal
year ended December 31, 2024, are incorporated by reference into Part III of this Form 10-K.
2024 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS
Page
PART I
Item 1.
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
Item 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18
Item 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
32
Item 1C. Cybersecurity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
32
Item 2.
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
33
Item 3.
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
34
Item 4.
Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
34
PART II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
35
Item 6.
[Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
37
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of
Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
37
Item 7A. Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . .
51
Item 8.
Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
53
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
94
Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
94
Item 9B. Other Information
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
95
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections . . . . . . . . . . . . . . . .
95
PART III
Item 10. Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . .
95
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
95
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
95
Item 13. Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . .
95
Item 14. Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
95
PART IV
Item 15. Exhibits and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
96
Item 16. Form 10-K Summary
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
102
Forward-Looking Statements
This annual report contains forward-looking statements that are subject to risks and uncertainties.
Forward-looking statements give our current expectations and projections relating to our financial condition,
results of operations, plans, objectives, future performance and business. You can identify forward-looking
statements by the fact that they do not relate strictly to historical or current facts. These statements may
include words such as “anticipate,” “estimate,” “expect,” “forecast,” “project,” “plan,” “intend,” “believe,”
“confident,” “may,” “should,” “can have,” “likely,” “future,” “optimistic” and other words and terms of
similar meaning in connection with any discussion of the timing or nature of future operating or financial
performance or other events.
The forward-looking statements contained in this annual report are based on assumptions that we have
made in light of our industry experience and on our perceptions of historical trends, current conditions,
expected future developments and other factors we believe are appropriate under the circumstances. As you
read and consider this report, you should understand that these statements are not guarantees of
performance or results. They involve risks, uncertainties (some of which are beyond our control) and
assumptions. Although we believe that these forward-looking statements are based on reasonable assumptions,
you should be aware that many factors could affect our actual financial results and cause them to differ
materially from those anticipated in the forward-looking statements. The forward-looking statements
contained in this annual report include estimates regarding:
• our business, financial and operating results, and future economic performance;
• proposed new product and service offerings; and
• management’s goals, expectations and objectives and other similar expressions concerning matters
that are not historical facts.
Factors that could affect our actual financial results and cause them to differ materially from those
anticipated in the forward-looking statements include:
• fluctuations in cost, availability, and quality of raw materials, key components and labor required to
manufacture our products;
• our dependence on a small number of contract manufacturers and component suppliers, including
single-source suppliers;
• our ability to protect our intellectual property rights or successfully defend against third party
infringement claims;
• increase in product and other liability claims, warranty costs, recalls, or other claims;
• significant legal proceedings, claims, fines, penalties, tax assessments, lawsuits or government
investigations;
• changes in U.S. trade policy, including the imposition of new or increased tariffs;
• our ability to consummate our share repurchase programs;
• our failure or inability to adapt to, or comply with, current or future changes in applicable laws,
regulations, and product standards;
• scrutiny regarding our sustainability practices;
• our ability to develop and enhance products and gain customer acceptance for our products;
• frequency and duration of power outages impacting demand for our products;
• changes in durable goods spending by consumers and businesses or other macroeconomic conditions,
impacting demand for our products;
• our ability to accurately forecast demand for our products and effectively manage inventory levels
relative to such forecast;
• our ability to remain competitive;
• our dependence on our dealer and distribution network;
• market reaction to changes in selling prices or mix of products;
• loss of our key management and employees;
• disruptions from labor disputes or organized labor activities;
• our ability to attract and retain employees;
• disruptions in our manufacturing operations;
• the possibility that the expected synergies, efficiencies and cost savings of our acquisitions, divestitures,
restructurings, or realignments will not be realized, or will not be realized within the expected time
period;
• risks related to sourcing components in foreign countries;
• compliance with environmental, health and safety laws and regulations;
• government regulation of our products;
• failures or security breaches of our networks, information technology systems, or connected
products;
• our ability to make payments on our indebtedness;
• terms of our credit facilities that may restrict our operations;
• our potential need for additional capital to finance our growth or refinance our existing credit
facilities;
• risks of impairment of the value of our goodwill and other indefinite-lived assets;
• volatility of our stock price; and
• potential tax liabilities.
Should one or more of these risks or uncertainties materialize, or should any of these assumptions
prove incorrect, our actual results may vary in material respects from those projected in any forward-
looking statements. A detailed discussion of these and other factors that may affect future results is contained
in Item 1A of this Annual Report on Form 10-K. Stockholders, potential investors and other readers
should consider these factors carefully in evaluating the forward-looking statements.
Any forward-looking statement made by us in this report speaks only as of the date on which it is
made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is
not possible for us to predict all of them. We undertake no obligation to update any forward-looking
statement, whether as a result of new information, future developments or otherwise, except as may be
required by law.
PART I
Item 1.
Business
Overview
Founded in 1959, Generac is a leading global designer, manufacturer, and provider of a wide range of
energy technology solutions. Generac provides power generation equipment, energy storage systems, energy
management devices & solutions, and other power products serving the residential, light commercial, and
industrial markets. The Company continues to expand its energy technology offerings for homes and
businesses in its mission to Power a Smarter World and lead the evolution to more resilient, efficient, and
sustainable energy solutions.
We have a long history of providing power generation products across a variety of applications, and we
maintain one of the leading positions in the North American market for power equipment with an expanding
presence internationally. We believe we have one of the widest ranges of products in the power generation
marketplace, including residential, commercial, and industrial standby generators, as well as portable and
mobile generators used in a variety of applications. The Company is evolving its product portfolio by building
out ecosystems of energy technology products, solutions, and services for homes and businesses, enabling
end users to better manage their energy costs and needs. As part of this evolution, we have made significant
investments into developing markets such as residential and commercial & industrial (C&I) energy storage,
solar power inverters, energy monitoring & management devices, and electric vehicle (EV) charging. Central
to these ecosystems are the Company’s advanced connectivity devices, controls capabilities, and software
platforms that facilitate the integration of our products into grid services programs. In addition, we have been
leveraging our leading position in the growing market for natural gas fueled generators, which we believe
represents a cleaner fuel compared to diesel, to expand into applications beyond standby power, allowing us
to participate in multi-purpose microgrid projects for C&I customers. As the traditional centralized utility
model evolves over time, we believe that a more decarbonized, digitized, and decentralized grid infrastructure
will develop, and our energy technology solutions are uniquely and strategically positioned to participate
in this next-generation grid.
Given our competitive strengths in our traditional power generation markets, we believe we are well-
positioned to execute on the growing opportunity for backup power for homes and businesses, where
increased penetration is being driven by multiple mega-trends that are resulting in poorer power quality for
end users. In addition, our focus on more resilient, efficient and sustainable energy solutions has dramatically
increased our served addressable market, and as a result, we believe we can continue to be a leader as
energy costs rise and end markets evolve over time.
Company History
Generac Power Systems, Inc. was founded in 1959 to commercialize a line of affordable portable
generators that offered superior performance and features. Its success through the years has been built upon
engineering expertise, manufacturing excellence and innovative approaches to the market. This has driven
our growth into becoming a leading provider of power equipment for a variety of applications within
residential, commercial, and industrial markets.
In the 1980’s, we expanded beyond portable generators into the industrial power generation market
with the introduction of our first stationary generators that provided up to 200kW of power output. We
introduced our first residential standby generator in 1989 and expanded our industrial product offering and
global distribution system in the 1990’s, forming a series of alliances that rapidly increased our sales. Our
growth accelerated in the 2000’s as we expanded our purpose-built line of residential and commercial
automatic standby generators and implemented our multi-layered, omni-channel distribution philosophy.
Throughout the 2000’s, a number of high-profile power outage events also helped to increase the awareness
and need for backup power and home standby generators. In 2006, our founder sold the company to
affiliates of CCMP Capital Advisors, LLC, together with certain other investors and members of our
management. In connection with that transaction, Generac Holdings Inc. was formed as a Delaware holding
company. Generac Power Systems, Inc. is a wholly owned subsidiary of Generac Holdings Inc. For ease of
reference in explaining the general activities of its related entities in this report, Generac Holdings Inc. includes
1
here the operating activities of its wholly owned subsidiaries. In February 2010, we completed our initial
public offering (IPO) of the Company’s common stock. Since then, we have scaled our sales & marketing
capabilities and systems, while also building the Generac brand into one of the leading names in backup
power around the nation.
Soon after going public, we implemented our “Powering Ahead” enterprise strategy. This strategic plan
accelerated the Company’s transition from primarily a North America focused, emergency backup generator
company into a more diversified industrial technology company with the addition of new and adjacent
product categories and an expanded global presence, primarily through a series of acquisitions. It is during
this time in the 2010’s that we formed and built out our International segment, which provided additional
capability to expand and increase market share by introducing our broad product offering into local
markets around the world.
In 2018, we transitioned to a new enterprise strategy called “Powering Our Future”, which drove
further share gains in new and existing markets, capitalized on our leadership in natural gas gensets,
established our connectivity strategy, and provided the foundation for the Company’s evolution into an
energy technology solutions company, including our initial acquisitions within the residential clean energy
space. This ultimately led to the introduction of our “Powering A Smarter World” enterprise strategy in 2021.
Our current strategic plan continues the evolution of Generac’s business model that pairs traditional and
renewable power generation, conversion, and storage technologies with new monitoring, management and
grid services capabilities to provide solutions for the dynamic challenges presented by today’s energy landscape.
Significant Investments in Energy Technology Solutions
We have been providing power generation and resiliency solutions for homes and businesses for
decades. Leveraging that expertise in power generation, Generac has made significant investments in
recent years to expand its capabilities into energy technology solutions, beginning with the March 2019
acquisition of Neurio Technology Inc., a leading energy data company focused on monitoring technology
and sophisticated analytics to optimize energy use within a home or business. This was followed by the
April 2019 acquisition of Pika Energy Inc. (Pika Energy), a designer and manufacturer of battery storage
technologies that capture and store solar or other power sources for homeowners and businesses. In
October 2020, the Company acquired Enbala Power Networks Inc., one of the leading providers of
distributed energy optimization and control software that helps support the operational stability of the
world’s power grids. In July 2021, Generac added to its residential clean energy portfolio with the acquisition
of Chilicon Power LLC (Chilicon), a designer and provider of grid-interactive rooftop power inversion
devices and monitoring solutions for the solar market. Although we do not believe battery storage applications
will displace traditional engine driven backup generators used for power resiliency in the short or medium
term, our strategy and continued investment in such energy technology solutions will help ensure Generac
maintains its leadership as an energy solutions provider as battery technology evolves over time. With these
acquisitions, Generac has established a presence in the rapidly developing residential clean energy market,
focused on solar and battery storage solutions, as well as grid services platforms and grid-connected solutions.
With these investments, we are able to provide another source of power resiliency that complements our
traditional backup power business.
In December 2021, Generac acquired ecobee Inc. (ecobee), a leader in sustainable home technology
solutions. In addition to smart home thermostatic controls and other smart home devices, ecobee offers its
customers the ability to participate in energy services programs, which allow homeowners to reduce energy
consumption and utility bills via intelligent HVAC controls. The acquisition represents a major step
forward in the Company’s efforts to provide an integrated residential energy ecosystem that includes a
sophisticated user interface platform to allow homeowners to take charge of their energy generation, storage,
consumption, and management. By leveraging ecobee’s product and software development expertise to
create the central hub of our residential energy ecosystem, we believe ecobee’s solutions will prove to be a
differentiator for Generac when combined with our growing suite of energy technology solutions.
In December 2023, Generac made a minority investment in Wallbox N.V. (Wallbox) (NYSE: WBX), a
global leader in smart EV charging and energy management solutions. Along with the investment, Generac
and Wallbox are working together on commercial arrangements to provide Wallbox’s full suite of EV
2
charging solutions to Generac’s customers and distribution partners. To further strengthen this relationship,
we made an additional minority investment in Wallbox in August 2024.
Following these acquisitions and investments, we have made considerable organic investments in
improving the quality, reliability, and manufacturability of the solutions provided. For example, in 2023, we
opened a dedicated engineering center of excellence in Reno, Nevada that currently houses the development
and testing of batteries, switches, power electronics, and other clean energy solutions. We have also made
considerable progress in building out leadership teams and integrating the technical capabilities from our
recent acquisitions, which will help drive our energy technology strategic initiatives forward. The integration
of these technologies expands upon our well-established value proposition of providing homeowners with
resiliency by also optimizing for cost, convenience, and comfort.
As we look to the future, we expect to make continued investment in the development of these
residential energy technologies, as we work to further broaden our product offering and distribution
network. While the policy back drop for the clean energy market may evolve over time, we believe customer
interest and demand, as well as government programs and support for such energy technology products,
will continue as grid capacity is strained and energy costs rise. With this opportunity in front of us, we plan
to build out our residential energy technology capabilities and our suite of products and solutions as we
expect to play an important role in the transition to a more sustainable and reliable electric grid.
Generac’s efforts in expanding its energy technology solutions extend to C&I and international markets
as well. In June 2021, the Company acquired Deep Sea Electronics Limited (Deep Sea), a UK-based designer
and manufacturer of advanced controls for a range of power generation and other applications used
around the world. In September 2021, Generac acquired Off Grid Energy Ltd., a designer and manufacturer
of industrial-grade mobile energy storage systems serving predominantly rental markets. The Company
advanced its C&I connectivity strategy with the October 2022 acquisition of Blue Pillar, an industrial internet
of things (IoT) platform developer that designs, deploys, and manages industrial IoT solutions. Blue Pillar
provides a foundation to connect, monitor, and manage our C&I products to further enable their use in grid
services programs. In February 2023, Generac acquired REFU Storage Systems GmbH (REFU), a German-
based developer and supplier of battery storage and inverter hardware products, advanced software, and
platform services for the commercial and industrial markets. REFU’s energy storage systems will
complement and enhance our current global product offerings and are expected to further accelerate our
development of new technologies in the energy technology space. Additionally, in 2024, we strengthened our
presence in the emerging North American markets for C&I behind-the-meter energy storage and multi-
asset microgrids with the acquisitions of SunGrid’s C&I battery energy storage system (BESS) product
offering and Ageto, a leading provider of microgrid controllers that seamlessly integrate, optimize and
manage distributed energy resources (DERs). These acquisitions and related organic initiatives collectively
help lay the groundwork to further advance our energy technology strategies across C&I markets around the
world.
For a complete summary of recent acquisitions, please see Note 1, “Description of Business,” to the
consolidated financial statements in Item 8 of this Annual Report on Form 10-K.
Products and Solutions
We design, manufacture, and distribute a broad range of energy technology products and solutions. We
design and manufacture stationary, portable, and mobile power generators with single-engine outputs ranging
between 800W and 3,250kW. We have developed a line of energy storage systems for use in residential solar-
plus-storage applications. We also have a line of stationary and mobile energy storage systems that serve
global C&I markets. We have a selection of energy monitoring and management devices that we expect to
serve as the central hub or controls platform for our residential and C&I energy ecosystems. We participate
in the market for grid services by providing DERs and the software to optimize and control those assets to
support the grid. We design and manufacture other power products including light towers and a broad line
of outdoor power equipment that we refer to as “chore products”, which includes a variety of property
maintenance equipment powered by both engines and batteries. We classify our products and services into
three categories based on similar ranges of power output geared for varying end customer uses: Residential
products, C&I products, and Other products and services. The following summary outlines these categories,
including their key attributes and customer applications.
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Residential Products
Our residential automatic standby generators range in output from 7.5kW to 150kW, which
predominantly operate on natural gas and liquid propane, and are permanently installed with an automatic
transfer switch, which we also manufacture. Air-cooled engine residential standby generators range in
outputs from 7.5kW to 26kW and serve as an emergency backup for small to medium-sized homes. Liquid-
cooled engine generators serve as emergency backup for larger homes and small businesses and range in
output from 22kW to 150kW.
As the product category leader, we believe we have the broadest line of home standby generators in the
marketplace. Every home standby generator that we offer is equipped with Mobile Link™. This remote
monitoring capability is a standard feature that allows our customers to check the status of their generator
remotely from their smart phone or tablet and also provides the capability to similarly receive maintenance
and service alerts. This remote monitoring information can also be accessed by our dealers to help them
monitor their installed base of products and proactively support their customers. The data that is provided
by this remote monitoring functionality also allows us to better understand our products in the field, while
optimizing both product quality and customer satisfaction. We also offer propane tank monitoring
solutions, a technology that we acquired in 2021 via Tank Utility Inc. (Tank Utility), an IoT propane tank
monitoring solutions company. This additional monitoring capability drives further incremental value to our
dealers and peace of mind to owners of our home standby generators that use propane as a fuel source.
Leveraging the technologies acquired in the 2019 acquisition of Pika Energy and the subsequent
organic investments we have made in clean energy, we have developed a line of residential battery storage
systems marketed under the Generac brand and using the PWRcell™brand name. This system captures and
stores electricity from solar panels or other power sources and helps reduce home energy costs while also
protecting homes from shorter duration power outages. PWRcell systems can range in size from 9kWh up
to 36kWh of storage capacity. In 2025, we expect to launch the PWRcell 2 Series, the next generation of our
PWRcell energy storage system, which includes significant improvements in performance and compatibility
as compared to the first generation.
In 2021, we acquired ecobee, a leader in sustainable smart home solutions such as smart thermostats
and a suite of home monitoring products, all designed with a focus on energy conservation, convenience,
peace of mind and comfort. ecobee’s smart home energy management devices and complementary sensors
intelligently optimize heating and cooling systems, often the largest energy consuming system within a home,
to deliver significant energy savings for homeowners. In 2023, ecobee launched a line of smart doorbell
cameras, which integrates with ecobee’s products and helps to drive increased consumer engagement with
their platform. The capabilities acquired via ecobee, paired with our existing Mobile Link remote monitoring
system, provide the foundation for Generac’s residential connectivity infrastructure, which will be integral
in the continued development of our smart home energy ecosystem.
Importantly, we are leveraging ecobee’s technologies and software development expertise to develop a
user interface at the center of our home energy ecosystem that will allow homeowners to monitor and control
Generac’s entire suite of products using a “single pane of glass”. In 2023, we took our first steps towards
this goal by successfully integrating our home standby generators and propane tank monitors with the ecobee
platform. Our next-generation clean energy products and solutions, including PWRcell 2 and Wallbox’s
EV charging solutions, will be fully integrated with the ecobee platform. We believe the integration of our
products and solutions in a single cohesive ecosystem will drive additional peace of mind, energy efficiency,
and ultimately lower utility bills for homeowners.
This functionality will also help enable connection to grid services distributed energy resource
management software (DERMS), including our in-house solution called Concerto. All of our residential
energy technology products and home standby generators come with grid-connection capabilities, enabling
consumers to connect and enroll their DERs in available grid services programs. These utility-sponsored
programs, when and where offered, can provide value to homeowners in the form of lower utility costs,
while also helping provide grid operators incremental capacity to address supply/demand imbalances on the
grid.
We continue to develop new Generac-branded energy technology products that we expect to bring to
market as we build out a broader energy management ecosystem, giving our distributors access to a more
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diverse line-up of products that can serve a variety of applications. For example, our investment in Wallbox
has allowed us to participate in the rapidly developing home EV charging market by offering co-branded
EV charging technologies through our expansive distribution network.
We also provide a broad product line of portable and inverter generators that range in size from 800W
to 18kW, as well as multiple portable battery solutions that provide clean, emission-free power at the push
of a button. These products can help serve as an emergency home backup source of electricity on a limited
basis, and they can also be used for construction and recreational purposes. Our portable generators are
targeted at homeowners, with price points ranging between the consumer value end of the market through
the premium homeowner market; at professional contractors, starting at the value end through the premium
contractor segment; and at the recreational market with our inverter generator products, which are quieter
than traditional portable generators. In addition, we offer manual transfer switches to supplement our portable
generator product offering.
We provide a broad product line of outdoor power equipment referred to as “chore products”, which
are used in property maintenance applications for larger-acreage residences, commercial properties,
municipalities, and farms. These products include trimmers, field and brush mowers, log splitters, stump
grinders, chipper shredders, lawn and leaf vacuums, pressure washers and water pumps. We also offer
commercial-grade, battery-powered turf care products through our “Mean Green” brand name, which was
acquired in 2020. Chore products are largely sold in North America through direct-to-consumer online
catalogs, retail hardware stores, and outdoor power equipment dealers, primarily under the DR® brand
name.
Residential products comprised 56.6%, 51.3% and 63.8%, respectively, of total net sales in 2024, 2023
and 2022.
Commercial & Industrial Products
We offer a full line of C&I generators that are sold around the world. We are a leader in cleaner-
burning natural gas fueled generators and also have a full offering of C&I generators that are fueled by
diesel and Bi-FuelTM. We believe we have one of the broadest product offerings in the industry with power
outputs ranging from 10kW up to 3,250kW. Through our Deep Sea subsidiary, we have expanded our
capabilities in the design and manufacture of advanced controls for a range of C&I power generation
applications. Our natural gas C&I stationary generators have grid-connection capabilities, enabling our
customers to generate an incremental return on investment by connecting and enrolling their generator as a
DERs in grid services applications where available.
Our light-commercial standby generators and related transfer switches include a full range of affordable
systems from 22kW to 150kW, providing three-phase power sufficient for most small and mid-sized businesses
such as grocery stores, convenience stores, restaurants, gas stations, pharmacies, retail banks, small health
care facilities and other small-footprint retail applications. Our light-commercial generators predominantly
run on natural gas and liquid propane.
We design and manufacture a broad product line of modularized and configured stationary generators
and related transfer switches for various industrial standby, continuous-duty, and prime rated applications.
Our single-engine industrial generators range in output from 10kW up to 3,250kW, include stationary and
containerized packages, and can include our Modular Power Systems (MPS) technology that extends our
product range up to much larger multi-megawatt systems through an integrated paralleling configuration.
Over the past several years, we have introduced larger and higher-powered gaseous-fueled generators, with the
highest output of 1,000kW for a single-engine set. Our industrial standby generators are primarily used as
emergency backup for larger applications (such as healthcare, telecom, datacom, commercial office, retail,
municipal and manufacturing, to name a few). In recent years, we have seen interest in utilizing our gaseous-
fueled generators in “beyond standby” applications including distributed generation and microgrid projects
and have developed purpose-built products for these applications that have grid-connected capability.
This grid-connected functionality and the significant expansion of our in-house advanced controls capabilities
further enhances the opportunity for our generators to be used in these applications.
Our MPS technology combines the power of several smaller generators to produce the output of a
larger generator, providing our customers with redundancy and scalability in a cost-effective manner. For
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larger industrial applications, our MPS products offer customers an efficient, affordable way to scale their
standby power needs, while offering superior reliability given their built-in redundancy which allows
individual units to be taken off-line for routine maintenance while retaining coverage for critical circuits.
We also offer a full line of industrial transfer switches to meet varying needs from light commercial
applications all the way up to the most demanding mission-critical installations. In recent years, we have
significantly increased and upgraded our industrial transfer switch product offering, which we believe will
help to enhance our attachment rate and related market share for these products. Generac’s innovative feature
set and flexible platforms offer a variety of switching configurations to meet almost any project needs.
We design and manufacture a broad product line of C&I mobile products such as light towers and mobile
generators, which provide temporary lighting and power for various end markets around the world (such as
road and commercial construction, energy, mining, military, and special events). We also offer commercial
mobile pumps, heaters, and dust-suppression equipment for a wide variety of applications. Our mobile
products are typically sold globally to national and regional rental companies who then rent the equipment
to the end user.
We have continued to expand our portfolio of energy technology solutions for C&I applications as
well. In 2021, we acquired Off Grid Energy, a European based manufacturer of mobile energy storage
systems predominantly used in the rental markets. In 2023, we acquired REFU, a European based provider
of stationary C&I BESS solutions and related inverter products, which expanded our product offering to
enter certain C&I BESS markets around the world. In 2024, we strengthened our position in the North
American C&I BESS market with the acquisitions of SunGrid’s C&I BESS product offering and Ageto, a
leading provider of microgrid controllers that seamlessly integrate, optimize and manage DERs. We
believe these collective product offerings will enable us to capture market share in the rapidly developing
markets for C&I BESS and multi-asset microgrids in North America.
Our C&I BESS solutions are primarily targeted at “behind-the-meter” applications for on-site energy
storage. We expect to leverage our leading position as a provider of traditional stationary generators to gain
share in the global C&I BESS market. This expertise is particularly beneficial for multi-asset microgrid
solutions that combine generators with energy storage assets, providing the many benefits of behind-the-
meter storage with longer duration outage protection. These microgrids can include other energy assets such
as commercial EV charging capabilities, which we are now able to offer via our partnership with Wallbox.
We also continue to develop other energy technology products, including mobile battery-powered light
towers and hybrid mobile solutions that pair a battery with a diesel engine to reduce emissions and noise
pollution. In addition, we continue to provide various gaseous-engine control systems and accessories, which
are used in our natural gas generators, as well as sold to other gas-engine manufacturers and aftermarket
customers.
C&I products comprised 32.3%, 37.2% and 27.6%, respectively, of total net sales in 2024, 2023 and
2022.
Other Products and Services
Our “Other products and services” category primarily consists of aftermarket service parts and
product accessories sold to our customers, installation and maintenance services, extended warranty
revenue, grid services and other software-related subscription revenue, remote monitoring subscription
revenue, and other project management service offerings provided by our owned industrial distributors.
Included in this “Other products and services” category are certain revenues that are generated by
ecobee, Blue Pillar, Ageto, and our Concerto and Mobile Link software platforms, as follows:
ecobee recognizes service revenue in certain circumstances when a homeowner enrolls their smart
thermostat in a grid services program offered by their utility. ecobee can provide utilities direct connection
to a homeowner’s smart thermostat, thereby allowing control of a significant portion of the home’s electrical
load. In exchange for this capability, utilities pay ecobee for that connection.
The 2022 acquisition of Blue Pillar expanded our C&I connectivity capabilities and provided a
standard protocol for all of our C&I products to be connected. In addition to connectivity device sales, Blue
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Pillar recognizes software subscription and support revenue resulting from the monitoring and management
capabilities its platform provides to customers.
The 2024 acquisition of Ageto further enhanced our advanced control capabilities, particularly in the
C&I BESS and multi-asset microgrid markets. In addition to its controls hardware, Ageto’s solutions include
software-as-a-service contracts for site level system integration and control of end customer energy assets
that make up a microgrid.
Our Concerto energy-balancing software platform provides a highly flexible approach for controlling
and dispatching DERs from flexible loads, backup generators, energy storage systems, and other renewable
energy sources. Concerto gives utilities and grid operators the flexibility to operate virtual power plants in
real-time to better manage the escalating complexities of the future electrical grid.
Finally, our Mobile Link platform provides remote monitoring services for our residential home
standby customers and “Fleet” services for our residential home standby dealers, whereby we collect
subscription revenue for these services on a recurring basis.
“Other products and services” comprised 11.1%, 11.5% and 8.6%, respectively, of total net sales in
2024, 2023 and 2022.
Mega-Trends, Strategic Growth Themes, and Additional Business Drivers
In 2021, we unveiled our “Powering A Smarter World” strategic plan, which serves as the framework
for the significant investments we have made and will continue to make to capitalize on the long-term growth
prospects of Generac. Our enterprise strategy is based on the combination of several key mega-trends that
we believe will drive a number of significant strategic growth themes for our business.
Key Mega-Trends:
• Lower power quality continuing to drive demand for backup power solutions:
• More frequent severe and volatile weather impacting an aging grid, causing increased power
outage activity.
• Increasing deployment of intermittent generation sources coupled with accelerating electricity
demand trends driving supply/demand imbalances for utilities and grid operators.
• Higher power prices driving the need for energy management solutions:
• Electrification trends causing power demand to exceed supply, driving up power prices.
• Investment required to upgrade grid infrastructure and transition to renewable power sources,
pushing prices higher.
• Artificial intelligence adoption accelerating, creating a large market opportunity for backup power:
• Significant power requirements for the buildout of data centers to enable AI adoption could
drive further grid instability.
• Acceleration in the number of hyperscale and edge data centers that require significant backup
power.
• Growing demand for cleaner burning fuels:
• Natural gas and other alternative fuels are vital to the energy transition.
• Demand for natural gas-fueled backup generators growing as homes and businesses desire cleaner-
burning fuel sources of generation.
• Required investment in global infrastructure, driving demand for our products:
• Upgrading of aging and underinvested legacy infrastructure systems, such as power,
telecommunications, transportation, and water.
• Expanding investment for increasingly critical technology infrastructure as we transition to a
more “connected” society.
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• Home as a Sanctuary, driving increased demand for resiliency solutions that provide peace of mind:
• Increasing importance of the home with more people working from home and aging in place.
• Growing market for intelligent and connected homes that can provide improved energy
efficiency.
Strategic Growth Themes:
Power quality issues continue to increase.
Power disruptions are an important driver of consumer
awareness for backup power and have historically influenced demand for generators both in the United
States and internationally. Increased frequency and duration of major power outage events, that have a
broader impact beyond a localized level, increases product awareness and may drive consumers to accelerate
their purchase of a standby or portable generator during the immediate and subsequent period, which we
believe may last for six to twelve months following a major outage event. Energy storage systems offer similar
resiliency advantages to consumers and can benefit from these same awareness drivers, at least for short
duration power outages. The optional standby market for C&I power generation is also driven by power
quality issues and the related need for backup power. The impact of climate change has received increased
global focus in recent years, and an aging and underinvested electrical grid infrastructure remains highly
vulnerable to the expectation of more severe and volatile weather. Additionally, rapid growth in renewable
power sources such as solar and wind is resulting in increased intermittency of supply as more traditional
thermal generation assets are retired, further impairing the reliable supply of electricity. At the same time,
power demand is expected to meaningfully accelerate as a result of the rapid adoption of artificial intelligence
and related data center energy requirements, the re-industrialization of North America, and the
electrification of a wide range of consumer and commercial products, including transportation, HVAC
systems, and other major appliances. These developments are causing growing supply/demand imbalances
for grid operators across North America, which has led to high-profile examples of rolling blackouts and calls
for utility customers to reduce consumption to maintain grid integrity. In fact, the North American
Electric Reliability Corporation has labeled significant portions of the United States and Canada as being
at high or elevated risk of resource adequacy shortfalls in the 2025-2029 period due in part to these supply/
demand dynamics. We believe utility supply shortfalls and related warnings may continue in the future,
resulting in continued deterioration of power quality in North America. Finally, certain utilities are adopting
preventative power shutoff policies to reduce the risk of wildfires caused by their electrical distribution
equipment, predominately in the western half of the country. Taken together, we expect these factors to
continue driving increased awareness of the need for backup power and demand for Generac’s products
within multiple categories.
Home standby penetration opportunity is significant.
Many potential customers are still not aware of
the costs and benefits of automatic backup power solutions. With only approximately 6.5% penetration of
the addressable market of homes in the United States (which we define as single-family detached, owner-
occupied households with a home value of over $175,000, as defined by the U.S. Census Bureau’s 2023
American Housing Survey for the United States), we believe there are significant opportunities to further
penetrate the residential standby generator market both domestically and internationally. In addition to the
mega-trends supporting growth of the category, we believe by expanding and developing our distribution
network, continuing to invest in our product lines and technologies, and targeting our marketing efforts, we
can continue to build awareness and increase penetration for our home standby generators.
Solar, storage, and energy management markets continue to develop.
We believe the electric utility
landscape will undergo significant changes in the decade ahead due to accelerating demand growth, grid
instability and power quality issues, environmental concerns, and the continuing performance and cost
improvements in renewable energy and energy storage technologies. Importantly, we expect that a confluence
of factors will continue to drive meaningful increases in power prices for end users in the future. As a
result, on-site power generation from renewable sources and cleaner-burning natural gas generators are
projected to become more prevalent as will the need to monitor, manage, and store this power — potentially
developing into a significant market opportunity as utility customers seek alternative solutions to combat
rising power prices. In addition, battery storage provides customers another source of power resiliency for
shorter duration outages. Additionally, these markets are currently being supported by significant subsidies
and investment tax credits for consumers and businesses to help advance the adoption of clean energy
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technologies. Further, production tax credits are being offered to businesses that meet certain domestic
manufacturing requirements in the production of renewable energy products. While the expected duration
of these subsidies and tax credits may change, we believe the overall mega-trends that are driving the solar,
storage, and energy management markets currently provide sufficient incentive for long-term, value-
creating investments for market participants in this space. Given the significant market opportunity ahead
of us, we expect to further advance our capabilities in energy technology by increasing our product
development, sourcing, distribution, and marketing efforts. In addition, we plan to leverage our significant
competencies in the residential standby generator market to build our market position in the emerging
residential solar, storage, and energy management markets.
Emerging applications and business models utilizing our solutions open new market opportunities.
We
expect the evolution of the traditional electrical utility model toward decarbonized, digitized, and decentralized
solutions will create new market opportunities for our products. We believe that we can participate in this
future electrical grid in a bigger way by utilizing our products and solutions as DERs by grid operators. This
will require intelligent software platforms that are able to optimize an increasingly complex supply and
demand equation at both the individual site and grid level, such as our Concerto DERMS software. Our
residential and C&I connectivity, controls, and energy management capabilities will also enable new recurring
revenue opportunities as grid services programs continue to build out over time. Additionally, we believe
that growing interest in our C&I generator and BESS solutions that can be deployed in multi-asset microgrid
and “beyond standby” applications will continue to emerge and create incremental market opportunities in
the future. The significant advancements made in recent years in the connectivity of our products are core to
these newer capabilities, which have played a key role in the evolution of Generac into an energy technology
solutions company.
Natural gas generators, a continuing growth opportunity.
We believe natural gas will continue to be an
important and cleaner transition fuel of the future, compared to diesel, as the world continues to shift towards
lower emission power generation sources. Demand for natural gas generators continues to represent an
increasing portion of the overall C&I market, as the benefits of natural gas power generation are very
compelling relative to traditional diesel fueled generators. We also continue to explore and expand our
capabilities within new gaseous generator market opportunities, including continuous-duty, prime rated,
distributed generation, demand response, microgrids, and overall use as a DERs in areas where grid stability
is needed. Many of these applications are made possible by our natural gas generators having the capability
to participate in available grid services programs, helping to offset the purchase price of the equipment over
the product’s lifespan. Expanding our natural gas product offering into larger power nodes is also a part of
this growth theme in taking advantage of the continuing shift from diesel to natural gas generators. As a leader
in natural gas power generation, we believe we are well positioned to capitalize on this strategic growth
theme.
Increasingly critical nature and growing power consumption of digital infrastructure.
As the number of
“connected” devices continues to rapidly increase and wireless networks are considered critical infrastructure
in the United States, network reliability and up-time are necessary for our increasingly connected society.
This will require highly resilient cell tower sites across the network, and therefore necessitates the need for
backup power sources on site at these cell towers. Generac is the leading supplier of backup power to the
telecommunications market in the United States. As more mission-critical data is transmitted over wireless
networks, we believe the penetration rate of backup generators on cell towers must increase considerably to
maintain a higher level of reliability across the network. We have relationships with key Tier 1 carriers
and tower companies globally, in addition to having the distribution partners to provide local service support
to the global market. We believe these factors coupled with Generac’s ability to customize solutions to
each customer’s needs help us to maintain our strength within the global telecommunications market.
Additionally, the rapid increase in data centers is driving increased demand for backup power solutions,
given the critical nature of this infrastructure. AI requirements, hyperscalers, and the expansion of edge
computing and “connected devices”are expected to quadruple US data center energy consumption from 2023
to 2030, according to certain market forecasts. We believe this significant growth in power consumption
will drive demand for backup power and intelligent energy management solutions for individual data center
locations, the broader electrical grid, and other grid participants.
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Other Business Drivers
Impact of residential investment cycle.
The market for a number of our residential products is affected
by the residential investment cycle and overall consumer confidence and sentiment. When homeowners are
confident of their household income, the value of their home and overall net worth, they are more likely to
invest in their home. These trends can have an impact on demand for residential generators, energy storage
systems, and energy management devices. Trends in interest rates and the new housing market, highlighted by
residential housing starts, can also impact demand for these products. Demand for outdoor power
equipment is also impacted by several of these factors, as well as weather patterns. The existence of renewable
energy mandates, investment tax credits, and other subsidies can also have an impact on the demand for
solar and energy storage systems.
Impact of business capital investment and other economic cycles.
The global market for our C&I
products is affected by different capital investment cycles, which can vary widely across the different regions
and markets that we serve. These cycles include non-residential building construction, durable goods and
infrastructure spending, as well as investments in the exploration and production of oil & gas, as businesses
or organizations either add new locations or make investments to upgrade existing locations or equipment.
These trends and market conditions can have a material impact on demand for our products. The capital
investment cycle may differ for the various C&I end markets that we serve, including light commercial,
retail, office, telecommunications, rental, industrial, data centers, healthcare, construction, oil & gas and
municipal infrastructure, among others. The market for these products is also affected by general economic
conditions, fluctuations in interest rates, and geopolitical matters in the various countries where we serve, as
well as credit availability in those regions.
Enterprise Strategy
The mega-trends and strategic growth themes that we have identified support our enterprise strategy,
“Powering A Smarter World,” and our purpose statement, “To lead the evolution to more resilient, efficient,
and sustainable energy solutions.” As we continue to execute our strategic plan into the future, we are
focused on three key objectives: (i) improve energy resilience and independence, (ii) optimize energy efficiency
and consumption, and (iii) protect and build critical infrastructure. These objectives are further explained
as follows:
Improve energy resilience and independence.
Increase power reliability through onsite generation and
storage solutions that provide resiliency for homes, businesses and communities.
Homes, businesses, and communities are experiencing a deterioration in the reliable supply of electricity
due to a number of factors including: climate change impacts driving more severe and volatile weather leading
to increased power outages; a capacity constrained legacy power infrastructure that’s still predominantly a
one-way system; power infrastructure being impaired by underinvestment making it more susceptible to power
outages; regulatory and legislative actions focused on carbon intensity, coupled with incentives for adoption
of more intermittent renewable power sources; and a dramatic increase in power demand that could
outpace supply growth due to electrification trends, accelerating power demands of data centers and artificial
intelligence, and the re-industrialization of North America. We have one of the broadest product offerings
that we believe can directly address these challenges for homes and businesses. Our residential and C&I product
offering begins with emergency standby generators that can be supplemented with portable and mobile
power generators. We have also built out an offering of battery energy storage systems for behind-the-meter
residential and C&I applications. These onsite generation and storage solutions provide peace of mind
and protection against rising power quality issues by delivering energy resilience and independence for end
users and their communities. Many of these onsite solutions are capable of being connected to the grid and
can help support overall grid reliability, resiliency and sustainability when enrolled in utility grid services
programs.
Optimize energy efficiency and consumption.
Enable sustainable and more efficient power generation
and consumption through monitoring, management and lower-carbon solutions.
Multiple entrenched trends are expected to drive accelerated demand growth for electricity in the
coming years. These power demand trends will require utilities and energy retailers to meaningfully increase
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the supply and reliability of electricity, while at the same time working to achieve carbon-reduction goals,
which is expected to further contribute to supply/demand imbalances for power. Additionally, the combination
of accelerating demand growth with significant investments in maintaining, upgrading, and decarbonizing
the power grid is likely to cause meaningful increases in the price of electricity, ultimately driving home and
business owners to adopt solutions to offset the impact of rising costs. As part of our expanding ecosystems
of energy technology solutions, we continue to build out our residential energy management capabilities,
which improve energy efficiency and optimize consumption for end users. This includes ecobee smart
home energy management devices, propane tank monitoring solutions, Wallbox EV charging equipment,
and other load management devices. Our battery storage solutions for both residential and C&I applications
allow end users to store power that is often generated on-site to optimize the timing of consumption. With
this capability, home and business owners can discharge power from their battery at times when utility rates
are at their highest, thereby saving money on their utility bills. Battery storage systems, along with smart
thermostats and other DERs, can also participate in grid services programs, helping to enhance the efficiency
of the broader electrical grid.
We continue to build out our system level controls by leveraging our deep software development
capabilities brought on by various acquisitions. These controls enable the monitoring and management that
is necessary to optimize energy efficiency and consumption. For our residential products, we are developing
a common platform and user interface to bring all of our residential products into a single ecosystem. Using
ecobee as the central hub and MobileLink as our connectivity platform, we are able to link all of our
installed residential products together for a seamless consumer experience to monitor, manage, and control
their energy generation, storage, and consumption. For our C&I products, we are developing a similar
ecosystem of controls that are building off Deep Sea’s industrial controls, Blue Pillar’s IoT network solutions,
and Ageto’s multi-asset microgrid control technology, helping businesses to better optimize their energy
efficiency and consumption. These enhanced control capabilities provide the foundation for the continued
build out of a common system-level platform for our C&I customers to monitor, manage, and control all of
their DERs, including non-Generac assets as well.
Protect and build critical infrastructure.
Offering innovative solutions that enable and protect next-
generation power, telecommunications, transportation, water, and other critical infrastructure.
The critical power infrastructure around the world is becoming more sensitive to growing electricity
supply/demand imbalances. Generac’s suite of products can be connected and synchronized within DERMS
platforms, such as our Concerto offering, providing utilities and grid operators the flexibility to access and
control these DERs in real-time to better manage the escalating complexities of their electrical grids. When
utilized in these applications, our residential and C&I products essentially provide power capacity to
utilities and grid operators in the form of a virtual power plant. We believe the next generation of critical
power infrastructure will be more decarbonized, digitized and decentralized, and we view the aggregation and
management of DERs as an important aspect in supplementing the next generation grid.
As society becomes more “connected” and more mission-critical data travels over wireless networks,
reliability and uptime of this telecommunications equipment will be essential to maintain our way of life. As
a leader in providing backup power generators for wireless cell towers around the world, we believe we can
play an important role in helping to protect and build this critical infrastructure. In addition, we believe that
data centers will be considered critical infrastructure as more data will be accessed from the “cloud” and
artificial intelligence becomes more ubiquitous in our everyday lives. As a result, backup power solutions will
be important elements of this next-generation infrastructure in order to make them more resilient.
Our broad offering of C&I mobile products (including mobile light towers, mobile power generators,
mobile energy storage systems and hybrid generators) play a key role in the completion of infrastructure
construction projects, such as roads, highways, bridges, and airports. Finally, our products are also commonly
used to provide standby power to other critical infrastructure such as water and wastewater systems and
other municipal infrastructure, as well as healthcare facilities that are vital for a safe and healthy society.
See “Item 7, Management’s Discussion and Analysis of Financial Condition and Results of
Operations — Business Drivers and Operational Factors” of this Annual Report on Form 10-K for
additional drivers that influence demand for our products and other factors affecting the markets that we
serve.
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Distribution Channels and Customers
We distribute our products through a variety of distribution channels to increase awareness of our
product categories and brands, and to ensure our products reach a broad, global customer base. This omni-
channel distribution network includes independent residential dealers and contractors, industrial
distributors and dealers, national and regional retailers, e-commerce partners, electrical/HVAC/solar
wholesalers, solar installers, catalogs, equipment rental companies, and other equipment distributors. We
also sell direct to certain national and regional account customers, as well as to individual consumers or
businesses who are the end users of our products.
We believe our global distribution network is a competitive advantage that has strengthened over
the years as we continue to add, expand and develop the various distribution channels through which we
sell our products. We offer a broad set of tools, programs, factory support, and sales leads to help our
distribution partners be successful. Our network is well balanced with no single customer providing more than
5% of our net sales in 2024.
We have the industry’s largest network of factory direct independent generator dealers in North
America. Our residential dealer network is made up of electrical and HVAC contractors across the US and
Canada. These dealers sell, install and service our residential and light commercial generators to end users.
Over the years, we have made significant investments to grow this dealer network, and we will continue to
make those investments in the future given the importance of this channel. We continue to focus on a variety
of initiatives to more effectively market and sell our home standby products and better align our dealer
network with Generac. We will continue our efforts to improve customer lead quality, nurture those leads,
and develop our dealers, all with a goal of increasing close rates and lowering our cost per lead over time. Over
the years, we have made significant investments in our proprietary in-home selling system for residential
dealers that we call “Power Play”. We are continuously making enhancements to this platform, again with
the objective of improving the customer experience and overall close rates. Additionally, our remote
monitoring platform allows our residential generator dealers to monitor their installed base of customers
through a feature that we call “Fleet”, enabling them to offer a more proactive experience to service a
customer’s generator. By offering the best product line, pricing, marketing, tools, programs, and customer
support, we believe we have built the strongest dealer network in the home standby generator industry.
In recent years, we have been establishing a base of solar contractors that sell, install and service our
PWRcell energy storage systems. Leveraging our decades of expertise in partnering with our residential
generator dealers, we believe we can expand our solar installer network and increase mindshare for Generac’s
products, helping us to win in the clean energy market in the future. In addition, we have been developing
distribution relationships with national solar providers to offer our equipment in their portfolio of products
and services. As we continue to launch new clean energy products in the future, we expect to accelerate
our efforts to expand distribution in this market.
Our industrial products distribution network consists of industrial power generation distributors that
cover particular regions around the world. Over the past several years, we have been strengthening our
industrial dealer network globally through acquisitions and organic means, to increase our C&I product
sales and related market share. Since 2020, we have acquired a number of our industrial distributors to give
us direct coverage of those regions in the United States and accelerate our efforts in those markets. Industrial
distributors and dealers provide C&I end users with ongoing sales, installation, service and product
support. Our industrial distributors and dealers help maintain the local relationships with commercial
electrical contractors, specifying engineers, and national account regional buying offices. We also sell to
certain EPC companies and other companies that specialize in managing more complex power generation
projects, including microgrids and “beyond standby” applications.
Our retail distribution channel includes thousands of locations across the globe and includes a variety
of national and regional home improvement chains, electronics retailers, clubs, buying groups, hardware &
farm supply stores, and outdoor power equipment dealers. These physical retail locations are supplemented by
a large presence of e-commerce retailers, along with a number of catalog retailers. The retail channel
primarily sells our residential standby, portable and light-commercial generators, as well as our outdoor
power equipment and ecobee smart home energy management devices. The placement of our products at
retail locations drives significant awareness for our brands and the home standby generator product category.
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Our wholesale network distributes our residential and light-commercial generators, residential energy
storage systems, and smart home energy management devices on a two-step basis. The channel consists of
selling branches of both national and local distribution houses for electrical, HVAC and solar equipment on
a wholesale basis, which in turn typically sell to electricians and HVAC/solar installers who are not in our
dealer network. As part of our efforts to increase sales & installation bandwidth for home standby generators,
we have established an Aligned Contractor Program that provides certain benefits to contractors that
purchase our products through the wholesale network and agree to participate in enhanced training sessions.
We believe that this program will further align Generac with these independent contractors which is
important during surge periods of demand in local markets.
On a selective basis, we have established private label and licensing arrangements with third party
partners to provide residential, light-commercial and industrial generators under different brand names.
These partners include leading home equipment, electrical equipment and construction machinery companies,
each of which provides access to incremental channels of distribution for our products. Additionally, our
ecobee products are also sold through HVAC OEMs on a co-branded basis.
The distribution for our C&I mobile products includes global, national, regional, and specialty
equipment rental companies, equipment distributors, and construction companies which primarily serve non-
residential building construction, road construction, energy markets and special events.
We also sell direct to certain customers that are the end users of our products covering a variety of end
market verticals both domestically and around the world. This includes telecommunication, retail, data
centers, banking, energy, healthcare, convenience stores, grocery stores, restaurants, governments, and other
commercial applications. We have developed a diverse, global sales force that calls on these opportunities
directly and helps customize solutions to each customer’s needs in their local markets. Additionally, certain
of our residential products are sold direct to individual consumers, who are the end users of the product. In
the grid services space, we sell software and equipment direct to utilities and grid operators.
Research and Development
Our focus on a broad range of energy technology products and solutions drives technological innovation,
advanced engineering & software development capabilities, and specialized manufacturing competencies.
Research and development (R&D) has been a core competency for Generac since our inception, and today
includes a staff of approximately 1,250 engineers working on numerous projects at various facilities around
the world. These activities are focused on new product introductions, developing new technologies and
product enhancements, as well as maintaining product competitiveness by reducing manufacturing costs,
improving safety characteristics, and increasing reliability & performance, while ensuring compliance with
regulatory standards. We have significant experience using natural gas engines and have developed specific
expertise with fuel systems and emissions technology. In the residential and light commercial markets, we
have developed proprietary engines, cooling packages, controls, fuel systems, and emissions systems which
help drive innovation while also enhancing the margin profile of those products.
More recently, we have also built out specific expertise around battery storage systems and power
conversion that we plan to leverage as we expand into clean energy markets. In addition, we have significantly
increased our software development capabilities across a variety of applications, including energy
management, system-level microgrid controls, remote monitoring, and distributed energy resource
management systems. Combining advanced software development with our broad engineering capabilities
will enable us to create common ecosystems for our residential and C&I products, helping us to accelerate our
energy technology efforts.
We also have engineering and product management resources focused on evaluating and developing
alternative technologies that are emerging and could become commercially viable over the long-term, such
as fuel cells and hydrogen. We have a long history of driving product innovation into the markets that we
serve. As we continue to develop new products and technologies that are more decarbonized, digitized,
and decentralized, we believe we can maintain our leadership position as an energy technology solutions
provider.
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Intellectual Property
We are committed to research, development, and product innovation, and we rely on a combination of
patents and trademarks to help establish and protect our proprietary rights. Our patents protect certain
features and technologies we have developed for use in our products including fuel systems, air flow, electronics
and controls, noise reduction, engines, energy management, energy monitoring, energy storage, and load
management. We believe the existence of these patents and trademarks, along with our ongoing processes to
register additional patents and trademarks, help protect our intellectual property rights and enhance our
brands and competitive position. We also use proprietary manufacturing processes that require customized
equipment. With our continuous focus on research and development, we expect to develop new intellectual
property on an ongoing basis.
See “Item 1A. Risk Factors” of this Annual Report on Form 10-K for additional factors related to
intellectual property rights that can affect our business.
Manufacturing
We operate numerous manufacturing plants, distribution facilities and inventory warehouses located
throughout the world. We also store finished goods at third-party logistics providers in the United States
that accommodate material storage and rapid response requirements of our customers. See “Item 2 —
Properties” of this Annual Report on Form 10-K for additional details regarding the locations and activities
of our principal operations.
Over the last few decades, we have developed significant manufacturing capability in the power
generation industry, including engines, alternators, sheet metal fabrication, and controls. We have a heavy
focus on vertical integration for certain proprietary manufacturing processes, and outsource certain
components and complete products where we can leverage scale to optimize cost and quality. In recent years,
we have added manufacturing capacity through investments in automation, while also expanding our
manufacturing footprint through organic means as well as through acquisitions. Our ability to rapidly
increase capacity has been critical to executing our growth.
For our energy technology products, our engineering and technical teams are closely aligned with our
contract manufacturing partners in order to leverage their expertise and capital investments involving
electrical component manufacturing.
Suppliers of Raw Materials, Components and Equipment
Our primary raw material inputs are steel, copper and aluminum, all of which are purchased from third
parties and, in many cases, as part of machined or manufactured components. In certain instances, we
purchase complete equipment or systems from third-party suppliers, including from contract manufacturers.
Given our increasing focus on energy technology solutions, advanced electronic components and micro-
processors have become a larger consideration within our supply chain. Within the clean energy market,
batteries are a significant supply chain input for our energy storage systems. Over multiple decades, we have
developed an extensive network of reliable suppliers in the United States and around the world. We
continuously evaluate the quality and cost structure of our purchased components & equipment and assess
the capabilities and capacity of our supply chain. We select our sourcing partners based on this evaluation.
For certain products, we do not have internal manufacturing capabilities and rely upon a small number of
contract manufacturers to build these products or supply these components, including but not limited to
certain energy technology products and components.
Over time, we have diversified the geographic reach of our global supply chain partners to partially
mitigate the impact of certain trade tariffs that have been assessed on imports coming into the United
States. We will continue to monitor ongoing developments with new trade tariffs that may be implemented
in the future, and take action to offset the impact of those tariffs.
See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations”
of this Annual Report on Form 10-K for additional information regarding the impact of other macroeconomic
factors.
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See “Item 1A. Risk Factors” of this Annual Report on Form 10-K for additional factors that can
influence our supply of raw materials, components and equipment.
Competition
In our traditional power generation markets, we face competition from a variety of large diversified
industrial companies, as well as smaller generator manufacturers or packagers around the world. The
competitive landscape varies between our Residential and C&I power generation products. We face a different
set of competitors for our mobile equipment and engine powered tools as well. In recent years, we have
expanded who we compete against as we enter certain energy technology markets, such as solar inverters,
battery storage systems, smart thermostats, and grid services.
In the generator market, many of the traditional participants compete in only certain portions of the
market, targeting specific applications within their larger diversified product mix. In addition, for certain
competitors, power generation is typically a smaller piece of their business, and therefore, is less prioritized
from a strategic standpoint. Generac’s primary focus is on power generation and storage equipment with a key
emphasis on standby, portable and mobile generators with broad capabilities across the residential, light-
commercial and industrial markets. We believe that our core focus on power generation and storage drives
product innovation and provides us with competitive advantages to win in the marketplace. We also believe
our broad product offering, diverse omni-channel distribution model, and strong factory support provide
additional advantages as well.
Residential products — Competitors include Rehlko (formerly known as Kohler Power), Briggs &
Stratton, Honda, Champion, Techtronics International, Harbor Freight, Husqvarna, Ariens, Tesla,
Enphase, Solar Edge, Google, Resideo, The Toro Company, Goal Zero, and Emerson along with a number
of other domestic and foreign competitors; certain of which also have broad operations in other manufacturing
businesses.
C&I products — Competitors include Caterpillar, Cummins, Rehlko (formerly known as Kohler
Power), IGSA, AKSA, MultiQuip, Wacker, Doosan, Atlas Copco, Himoinsa, FG Wilson, Woodward,
Planelec, and Co-map, as well as other domestic and foreign competitors that package engines and alternators
into power generation equipment in local markets around the world; certain of which focus on the market
for diesel generators as they are also diesel engine manufacturers.
Other products — Relative to service parts and extended warranty revenue, all of the above-named
companies are primary competitors. Relative to grid services optimization software, Autogrid/Schneider
and Energy Hub, along with other grid service solution providers, are primary competitors.
In a continuously evolving market, we believe our scale and broad capabilities position us well to
remain competitive. Overall, we compete primarily based on brand reputation, quality, reliability, pricing,
innovative features, breadth of product & solution offering, product availability and factory support.
Government Incentives and Regulation, including Environmental Matters
Generac’s growing presence in energy technology solutions has increased our exposure to renewable
energy mandates, investment tax credits, and other demand-creation subsidies from certain existing and
potential government incentives, such as incentives included in the U.S. Inflation Reduction Act that was
passed in 2022. These incentives cover a wide range of clean energy products and solutions, including solar
inverters, battery storage systems, grid services, and grid-edge devices. The availability, size, and outlook for
such incentives can impact the markets for these products and solutions. These legislative and regulatory
actions and other methods of government funding can be subject to changes in the political environment at
a given point in time. While the policy back drop for the clean energy market may evolve over time, we
believe customer interest and demand, as well as government programs and support for such energy
technology products, will continue as grid capacity is strained and energy costs rise.
As a manufacturing company, our operations are subject to a variety of federal, state, local and foreign
laws & regulations covering environmental, health and safety matters. Applicable laws & regulations include
those governing, among other things, emissions to air, discharges to water, noise, and employee & consumer
safety, as well as the generation, handling, storage, transportation, treatment, and disposal of hazardous
15
waste and other materials. In addition, our products are subject to various laws & regulations relating to
fuel requirements, labeling, and marketing.
Our products sold in the United States are regulated by the U.S. Environmental Protection Agency
(EPA), California Air Resources Board (CARB) and various other state and local air quality management
districts. All of our engines and engine-driven products sold in the U.S. are regulated, and these governing
bodies continue to pass regulations that require us to meet more stringent emission standards. In addition,
certain of our products are subject to safety standards as established by various other standards and
rulemaking bodies, including the U.S. Consumer Product Safety Commission (CPSC), among others.
Similarly, other countries have varying degrees of regulation for our products, depending upon product
application and fuel types.
See “Item 1A. Risk Factors” to this Annual Report on Form 10-K for additional legal and regulatory
factors that can affect the products we sell and the results of our operations.
Sustainability Practices
We published a report on our sustainability practices in April 2024. This report details certain measures
that align with our “Powering a Smarter World” enterprise strategy and our purpose statement: ‘To lead the
evolution to more resilient, efficient, and sustainable energy solutions.’ The information provided within
the sustainability report is not part of this report and is therefore not incorporated herein by reference. A copy
of the sustainability report is available on our Investor Relations webpage at Generac.com. We plan to
publish an updated report on our sustainability practices in April 2025 that coincides with the filing of our
annual Proxy Statement.
Human Capital
“Our People” is one of the foundational elements to our “Powering a Smarter World” enterprise
strategy and is a corporate value as well. We foster a culture of engagement to strengthen our company
while supporting individual achievement, inclusivity, and good corporate citizenship globally. We believe
our success is directly linked to our employees’ professional growth and personal well-being, combined with
strong families and communities.
Some examples of key human capital programs and initiatives that we are focused on include:
Health, wellness and safety — Employee health and safety is the Company’s top priority. Generac’s
total rewards program is based on the four pillars of balance, security, well-being and community. These
programs are designed to meet the varied and evolving needs of our diverse workforce. We maintain an
employee wellness program, incentivize healthy-living activities, and develop and administer company-wide
policies to help ensure the safety of each employee and compliance with government agency and other
standards.
Talent development & employee engagement — Our success is directly tied to our employees and what
we can accomplish together. We prioritize creating opportunities to help employees build careers and support
their growth as part of a meaningful and valuable employee experience. We hold internal career development
events as well as partner with third party educational resources to offer on the job learning, collaborative
work experiences and formal learning programs to support the progression and advancement of our workforce.
Further, we maintain an ongoing global employee engagement initiative with targeted action plans by
region, function, and business group. Action plans and their progress are measured by global employee
engagement surveys. A global human capital management system was implemented enabling Generac
management to make better talent decisions, proactively manage careers, scale globally and maintain
compliance. We are an equal opportunity employer whose hiring and promotion practices comply with all
the applicable laws and we do not condone employment discrimination in any form.
As of December 31, 2024, we had 9,239 employees, including part-time and temporary employees
working in our operations, manufacturing and supply chain functions. Of those, approximately 3,850
employees, including temporary workers, were directly or indirectly involved in manufacturing.
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Domestically, we have had an “open shop” bargaining agreement for the past 50 years that covers our
Eagle, Wisconsin facility. That facility is subject to a collective bargaining agreement that expires October 17,
2026, and is subject to Wisconsin’s Right to Work law. Through an acquisition in April 2024, three additional
smaller facilities, which are located in Bloomfield and Shelton, Connecticut and Bohemia, New York, are
subject to a collective bargaining agreement for its technicians. That collective bargaining agreement expires
October 31, 2027, and is subject to a Union Security provision. Additionally, our plants in Mexico, Italy,
Germany, and Spain are operated under various local or national union groups or works councils. Our other
facilities are not unionized.
Available Information
Our principal executive offices are located at S45 W29290 Highway 59, Waukesha, Wisconsin, 53189
and its telephone number is (262) 544-4811. The Company’s website is www.generac.com. Our annual reports
on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those
reports (if applicable) are available free of charge through the “Investor Relations” portion of our web site,
as soon as reasonably practicable after they are filed with the Securities and Exchange Commission (SEC).
The information provided on these websites is not part of this report and is therefore not incorporated
herein by reference.
Information About Our Executive Officers
The following table sets forth information regarding our executive officers:
Name
Age
Position
Aaron P. Jagdfeld
53
President, Chief Executive Officer and Chairman
York A. Ragen
53
Chief Financial Officer
Erik Wilde
50
President, Domestic C&I
Raj Kanuru
54
Executive Vice President, General Counsel and Secretary
Norman Taffe
58
President, Energy Technology
Kyle Raabe
50
President, Consumer Power
Aaron P. Jagdfeld has served as our Chief Executive Officer since September 2008, as a director since
November 2006 and was named Chairman in February 2016. Prior to becoming Chief Executive Officer,
Mr. Jagdfeld worked for Generac for 15 years. He began his career in the finance department in 1994 and
became our Chief Financial Officer in 2002. In 2007, he was appointed President and was responsible for
sales, marketing, engineering and product development. Prior to joining Generac, Mr. Jagdfeld worked in
the audit practice of the Milwaukee, Wisconsin office of Deloitte and Touche. Mr. Jagdfeld holds a Bachelor
of Business Administration in Accounting from the University of Wisconsin-Whitewater.
York A. Ragen has served as our Chief Financial Officer since September 2008. Prior to becoming
Chief Financial Officer, Mr. Ragen held Director of Finance and Vice President of Finance positions at
Generac. Prior to joining Generac in 2005, Mr. Ragen was Vice President, Corporate Controller at APW Ltd.,
a spin-off from Applied Power Inc., now known as Enerpac Tool Group. Mr. Ragen began his career at
Arthur Andersen in the Milwaukee, Wisconsin office audit practice. Mr. Ragen holds a Bachelor of Business
Administration in Accounting from the University of Wisconsin-Whitewater.
Erik Wilde began serving as our President, Domestic C&I in July 2016. Mr. Wilde was Vice President
and General Manager of the Mining Division for Komatsu America Corp., a manufacturer of construction,
mining, and compact construction equipment, from 2013 until he joined Generac. Prior to that role, he
held leadership positions as Vice President of the ICT Business Division and Product Marketing at Komatsu
America Corp. beginning in 2005. Mr. Wilde holds a Bachelor of Business Administration in Management
from Boise State University and an M.B.A. from the Keller Graduate School of Management.
Raj Kanuru is our Executive Vice President, General Counsel & Secretary and is the Company’s principal
legal and compliance officer, roles that he has held since joining Generac in 2013. Prior to joining Generac,
Mr. Kanuru served as in-house counsel at Caterpillar Inc. for almost 14 years within various leadership roles,
including in Caterpillar’s Securities, Regulatory and Tax group, in Caterpillar Financial, and in Caterpillar’s
17
Energy & Transportation group. From 2009 to 2013, Mr. Kanuru served as Vice President, General Counsel
and Secretary of Progress Rail Services Inc., and its subsidiaries (a Caterpillar company). He began his
legal career as a senior associate in the tax consulting practice of Arthur Andersen LLP. Mr. Kanuru holds
a Bachelor of Science in Finance degree from Birmingham-Southern College and received his Juris Doctor
degree from the University of Alabama.
Norman Taffe began serving as President, Energy Technology in August 2022. Prior to joining
Generac, Mr. Taffe was Executive Vice President North America Residential of SunPower Corporation
from 2018 to 2021. Prior to this, Mr. Taffe was Executive Vice President — Products and Vice President of
Power Plant Products and Solutions from 2013 to 2018. Mr. Taffe also worked in various engineering and
marketing management capacities at Cypress Semiconductor from 1989 to 2012, including Executive Vice
President — Consumer & Computation Devices from 2005 to 2012. Mr. Taffe holds a Bachelor of Science in
Electrical Engineering from the University of Michigan and an Executive MBA from Harvard Business
School.
Kyle Raabe has served as our President, Consumer Power since November 2019. Prior to rejoining
Generac, Mr. Raabe was Senior Vice President of North American Sales, Demand Planning and Sales
Operations from 2018 through 2019 and Vice President of Sales for the Commercial Security and Safety
groups from 2015 through 2018 at The Master Lock Corporation, a manufacturer of locks, combination
padlocks and other security products. Prior to working at The Master Lock Corporation, Mr. Raabe led
multiple groups at Generac Power Systems from 2007 through 2015 as Director of Wholesale and Dealer
Distribution, Vice President Wholesale Distribution Sales and Vice President, Industrial Distribution
Sales. Before joining Generac, Mr. Raabe served at Veolia North America, Environmental Services leading
Midwest Regional Service Operations. Mr. Raabe holds a BA, Biological Science from Lawrence University.
Item 1A.
Risk Factors
You should carefully consider the following risks. These risks could materially affect our business,
results of operations or financial condition, cause the trading price of our common stock to decline
materially or cause our actual results to differ materially from those expected or those expressed in any forward-
looking statements made by us. These risks are not exclusive, and additional risks to which we are subject
include, but are not limited to, the factors mentioned under “Forward-Looking Statements” and the risks of
our businesses described elsewhere in this Annual Report.
Risk factors related to our business and industry
Decreases in the availability and quality, or increases in the cost, of raw materials, key components and labor
we use to make our products could materially reduce our earnings.
The principal raw materials that we use to produce our products include steel, copper and aluminum as
well as batteries and advanced electronic components. We also source a significant number of component
parts from third parties that we utilize to manufacture our products. The prices of those raw materials and
components are susceptible to significant fluctuations due to trends in supply and demand, commodity prices,
currency rate changes, transportation costs, government regulations and tariffs, price controls, economic
conditions and other unforeseen circumstances beyond our control. We have seen such trends significantly
impact our business in the past resulting in higher costs and shortages in materials, components and labor, and
such impacts may continue or arise again in the foreseeable future. We typically do not have long-term
supply contracts in place to ensure the raw materials and components we use are available in necessary
amounts or at fixed prices. In the short-term, we haven’t always been able to fully mitigate raw material or
component price increases through product design improvements, price increases to our customers,
manufacturing productivity improvements, or hedging transactions, and if our mitigation efforts continue
to not be fully effective in the short or long-term, our profitability could be adversely affected. Also, our ability
to continue to obtain quality materials and components is subject to the continued reliability and viability
of our suppliers, including in some cases, suppliers who are the sole source of certain important components.
It has been challenging to consistently obtain adequate, cost efficient or timely deliveries of certain required
raw materials and components, or sufficient labor resources, and if this trend continues, we may be unable
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to manufacture sufficient quantities of products on a timely basis. This could cause us to lose additional
sales, incur additional costs, delay new product introductions or suffer harm to our reputation.
We depend upon a small number of outside contract manufacturers and component suppliers, as well as single-
source suppliers, for certain products and components, and our business and operations could be disrupted if we
encounter problems with these parties.
For certain products we rely upon contract manufacturers to build these products or supply these
components, including but not limited to certain clean energy products or components. The timing of
purchases in future periods could differ materially from our estimates due to fluctuations in demand
requirements related to varying sales levels as well as changes in economic conditions. Further, the revenues
that our contract manufacturers generate from our orders may represent a relatively small percentage of
their overall revenues. While we seek to negotiate supply agreements with all of our vendors, we may purchase
some products or components on a purchase order basis. As a result, fulfilling our orders may not be
considered a priority to these suppliers in the event of constrained ability to fulfill all of their customer
obligations in a timely manner. If any of these contract manufacturers or component suppliers were unable
or unwilling to manufacture or produce our products in required volumes and at high quality levels or
renew existing terms under supply agreements, we would have to identify, qualify and select acceptable
alternative contract manufacturers, which may not be available to us on favorable terms, if at all. Our reliance
on such contract manufacturers makes us vulnerable to possible capacity constraints and reduced control
over component availability, delivery schedules, quality issues, manufacturing yields and costs. Moreover, we
single-source certain types of parts in our product designs. Delays in our suppliers’ deliveries have sometimes
impaired, and may continue to impair, our ability to deliver products to our customers. A wide variety of
factors could cause such delays including, but not limited to, lack of capacity, economic downturns,
availability of credit, logistical challenges, labor or material shortages, trade restrictions, weather events,
political instability, geopolitical conflicts (such as conflicts in the Ukraine or the Middle East), terrorism,
civil unrest, disease or natural disasters. If any of these suppliers reduce or eliminate the supply of the
components to us in the future, our revenues, business, financial condition and results of operations would be
adversely impacted. Although we have ongoing contractual disputes with certain such suppliers, such
disputes have not to date had any significant adverse impact on our business, financial condition or results
of operation.
Our business could be negatively impacted if we fail to adequately protect our intellectual property rights or if
third parties claim that we are in violation of their intellectual property rights.
We consider our intellectual property rights to be important assets and seek to protect them through a
combination of patent, trademark, copyright and trade secret laws, as well as licensing and confidentiality
agreements. These protections may not be adequate to prevent third parties from using our intellectual
property without our authorization, breaching any confidentiality agreements with us, copying or reverse
engineering our products, or developing and marketing products that are substantially equivalent to or
superior to our own. The unauthorized use of our intellectual property by others could reduce our competitive
advantage and harm our business. Not only are intellectual property-related proceedings burdensome and
costly, but they could take years to resolve, and we might not ultimately prevail. We cannot guarantee that any
patents, issued or pending, will provide us with any competitive advantage or will not be challenged by
third parties. Moreover, the expiration of our patents may lead to increased competition with respect to
certain products. If we fail to protect our intellectual property and other proprietary rights, or if such
intellectual property and proprietary rights are infringed, misappropriated or otherwise violated, our business,
results of operations or financial condition could be materially harmed.
In addition, we cannot be certain that we do not or will not infringe third parties’ intellectual property
rights. We currently are, and have previously been, subject to such third-party infringement claims, and may
continue to be in the future. Any such claim, even if it is believed to be without merit, may be expensive
and time-consuming to defend, subject us to damages, cause us to cease making, using or selling certain
products that incorporate the disputed intellectual property, require us to redesign our products, divert
management time and attention, and/or require us to enter into costly royalty or licensing arrangements.
Certain parts of our business experience significant intellectual property litigation and we have in the past and
could in the future become involved in costly and lengthy litigation involving patents or other intellectual
19
property rights which could adversely affect our business. We have recently been subject to adverse rulings
or have settled claims for significant amounts related to the infringement of third-party intellectual property
rights, and may continue to be subject to such claims, damage awards or settlement payments. In addition,
we may not prevail in such future proceedings. An adverse outcome of any such proceeding may reduce our
competitive advantage or otherwise harm our financial condition and our business or potentially impair
our patents and technology intangible assets which could have a material adverse effect on our financial
statements.
For further information, see Note 18, “Commitments and Contingencies,” to the consolidated financial
statements in Item 8 of this Annual Report on Form 10-K.
We may incur costs and liabilities as a result of product liability, warranty claims, recalls, or other claims.
We face a risk from current and future product liability claims alleging to arise from the use of our
products and that may purportedly result in injury or other damage. Although we currently maintain
product liability insurance coverage, such insurance coverage may not be sufficient to cover claims or damage
awards or we may not be able to obtain such insurance on acceptable terms in the future, if at all, or
obtain insurance that will provide adequate coverage against potential claims. Product liability claims can
be expensive to defend and can divert the attention of management and other personnel for long periods of
time, regardless of the ultimate outcome. A significant unsuccessful product liability defense could have a
material adverse effect on our financial condition and results of operations. In addition, we believe our
business depends on the strong brand reputation we have developed. If our reputation is damaged due to
product liability or warranty claims, or recalls, we may face difficulty in maintaining our market share and
pricing with respect to some of our products, which could reduce our sales and profitability. We have and may
continue to experience product liability, product quality or reliability claims, or warranty claims with
respect to certain clean energy, generator, and/or chore products, including being subject to certain consumer
product class action lawsuits or other governmental fines or penalties in relation to such products. In the
event such product or warranty related claims continue or are significantly higher in the future, or we incur
losses or other damages associated with current or future product liability lawsuits or product related claims,
this may continue to adversely affect our reputation or brand quality in relation to such products, subject
us to significantly increased costs or penalties, and otherwise materially harm our results of operations,
financial condition and our business. Even in litigation where we believe the likelihood of liability is remote,
there is a risk that a negative finding or decision in a matter involving multiple plaintiffs or a purported
class action could have a material adverse effect on our competitive position, results of operations or financial
condition.
While we do record reserves for future warranty claims, our estimated warranty accruals for previously
sold products and our warranty costs for current product sales are based on assumptions using historical
experience, and we do not have a long history with respect to certain products. As a result, these assumptions
could prove to be materially different from the actual performance of such products, causing us to incur
substantial unanticipated expenses to repair or replace defective products in the future or to compensate
customers for defective products. Our failure to accurately predict future claims could have a material adverse
effect on our business, results of operations, or financial condition.
Moreover, we have and may continue to be exposed to product recalls and adverse public relations if
our products are alleged to have defects, to cause property damage, to cause injury or illness, or if we are
alleged to have violated governmental regulations. A product recall could result in substantial and unexpected
expenditures, which would reduce operating profit and cash flow. In addition, a product recall may require
significant management attention. Product recalls may hurt the value of our brands and lead to decreased
demand for our products. Product recalls have resulted in and may continue to lead to increased scrutiny,
fines or other penalties by federal, state or international regulatory agencies on our operations or business and
increased litigation and could have a material adverse effect on our consolidated results of operations,
financial condition and cash flows.
For further information, see Note 18, “Commitments and Contingencies,” to the consolidated financial
statements in Item 8 of this Annual Report on Form 10-K.
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The risk of non-compliance with U.S. and foreign laws and regulations applicable to our global operations
could have a significant impact on our results of operations, financial condition or strategic objectives.
Our global operations subject us to regulation by U.S. federal and state laws and multiple foreign laws,
regulations and policies. These laws and regulations are complex, change frequently, have become more
stringent over time and increase our cost of doing business. These laws and regulations include import and
export control, sanction and trade restriction laws, environmental, health and safety regulations, data privacy
requirements, international labor laws and work councils and anti- corruption and bribery laws such as the
U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act, the U.N. Convention Against Bribery and local
laws prohibiting corrupt payments to government officials.
We are subject to the risk that we, our employees, our affiliated entities, contractors, agents or their
respective officers, directors, and employees may take actions determined to be in violation of any of these
laws, for which we might be held responsible, particularly as we expand our operations geographically through
organic growth and acquisitions. An actual or alleged violation could result in substantial fines, sanctions,
civil or criminal penalties, debarment from government contracts, curtailment of operations in certain
jurisdictions, competitive or reputational harm, litigation or regulatory action and other consequences that
might adversely affect our results of operations, financial condition or strategic objectives.
If we fail to develop new products or enhance existing products, or our customers do not accept the new or
enhanced products we develop, our revenue and profitability could be adversely impacted.
Difficulties or delays in research, development or production of new or enhanced products or failure to
gain market acceptance of new or enhanced products and technologies may reduce future sales and adversely
affect our competitive position. We continue to invest in the development and marketing of new or enhanced
products. There can be no assurance that we will have sufficient resources to make such investments, that
we will be able to make the technological advances necessary to maintain competitive advantages or that we
can recover major research and development expenses. Certain of our products benefit from government
incentive or tax credit programs and we cannot be assured that these incentive or tax credit programs will be
maintained and for how long. For example, in July 2024, we received a grant from the U.S. Department of
Energy (DOE) to facilitate the installation of residential solar and battery storage systems for disadvantaged
Puerto Rican residents that, if fully realized and not terminated early, would provide up to $120 million in
funds over the duration of the five-year award agreement. If we fail to make innovations, experience
unexpected delays and/or quality problems in launching products, or the market does not accept our new
products, our financial condition, results of operations, cash flows and liquidity could be adversely affected.
In addition, as new or enhanced products are introduced, we must successfully manage the transition from
older products to minimize disruption in customers’ ordering patterns, avoid excessive levels of older or
obsolete product inventories and ensure that we can deliver sufficient supplies of new products to meet
customers’ demands.
Demand for the majority of our products is significantly affected by unpredictable power outage activity that
can lead to substantial variations in, and uncertainties regarding, our financial results from period to period.
Sales of our residential products are subject to consumer buying patterns, and demand for the majority
of our products is affected by power outage events caused by thunderstorms, hurricanes, wildfires, ice storms,
blackouts, public safety power shutoffs, and other power grid reliability issues, all of which affect our
ability to accurately manage our business and forecast future results. The impact of these outage events on
our sales can vary depending on the location, frequency and severity of the outages. Sustained periods without
major power disruptions can lead, and in the past have led, to reduced consumer awareness of the benefits
of standby and portable generator products and can result and have previously resulted in reduced sales
growth rates and excess inventory. There are smaller, more localized power outages that occur frequently
that drive a baseline level of demand for backup power solutions. The lack of major power outage events and
fluctuations to the baseline levels of power outage activity are part of managing our business, and these
fluctuations could have, and previously have had, an adverse effect on our net sales and profits. Despite their
unpredictable nature, we believe power disruptions create awareness and accelerate adoption and demand
for our home standby products.
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Demand for our products is significantly affected by durable goods spending by consumers and businesses, and
other macroeconomic conditions.
Our business is affected by general economic conditions, and uncertainty or adverse changes, such as
the prolonged downturn in U.S. residential investment and the impact of more stringent credit standards
and rising interest rates or inflation. These have previously led and could lead again to a decline in demand
for our products and increase pressure to reduce our prices. Our sales of light-commercial and industrial
generators are affected by conditions in the non-residential construction sector and by the capital investment
trends for small and large businesses and municipalities. If these businesses and municipalities cannot access
credit markets or do not utilize discretionary funds to purchase our products as a result of the economy or
other factors, our business could suffer and our ability to realize benefits from our strategy of increasing sales
in the light-commercial and industrial sectors could be adversely affected. In addition, consumer confidence
and home remodeling expenditures have a significant impact on sales of our residential products, and
prolonged periods of weakness in consumer durable goods spending has previously had, and could again
have a material impact on our business. We currently do not have any material contracts with our customers
which call for committed volume, and we cannot guarantee that our current customers will continue to
purchase our products at the same level, if at all. If general economic conditions or consumer confidence
were to worsen, or if the non-residential construction sector or rate of capital investments were to decline, our
net sales and profits would likely be adversely affected. Changes in government monetary or fiscal policies
may negatively impact our results, including increases in interest rates or sustained inflationary pressure which
could negatively affect overall growth and impact sales of our products. Additionally, timing of capital
spending by our national account customers can vary from quarter-to-quarter based on capital availability
and internal capital spending budgets. Our global operations are exposed to political and economic risks,
commercial instability and events beyond our control in the countries in which we operate. Such risks or
events may disrupt our supply chain and not enable us to produce products to meet customer demand.
If we do not forecast demand for our products accurately, we may experience product shortages, delays in product
shipment, excess product inventory, difficulties in planning expenses or disputes with suppliers, any of which
may adversely affect our business and financial condition.
We manufacture our products based on both actual customer orders and our estimates of customer
demand. This process requires us to make multiple forecasts and assumptions relating to the demand of our
distributors, their end customers, general market conditions, and other macroeconomic conditions. The
frequency and duration of power outages also affects demand for our products as described above. As a result,
it may be difficult to forecast customer demand to plan our operations, which may adversely affect our
business and financial condition. If we overestimate demand for our products, we may have excess inventory
that we cannot sell. We may have to make significant provisions for inventory write-downs based on events
that are currently not known, or discount finished goods to liquidate inventory, and such provisions or any
adjustments to such provisions and discounts could be material. We may also become involved in disputes
with our suppliers who may claim that we failed to fulfill forecast or minimum purchase requirements.
Conversely, if we underestimate demand, we may not have sufficient inventory to meet end-customer demand,
and we may lose market share, damage relationships with our distributors and end customers and forgo
potential revenue opportunities. Obtaining additional supply in the face of product shortages may be costly
or impossible, which could prevent us from fulfilling orders in a timely and cost-efficient manner or at all.
In addition, if we overestimate our production requirements, our contract manufacturers may purchase excess
components and build excess inventory. If our contract manufacturers, at our request, purchase excess
components that are unique to our products and are unable to recoup the costs of such excess inventory
through resale or return or build excess products, we could be required to pay for these excess parts or
products and recognize related inventory write-downs.
The industries in which we compete are highly competitive, and our failure to compete successfully could
adversely affect our results of operations and financial condition.
We operate in markets that are highly competitive. Some of our competitors have established brands
and are larger in size or are divisions of large, diversified companies which have substantially greater financial
resources than we do. Some of our competitors have and may continue to be willing to reduce prices and
accept lower margins in order to compete with us. In addition, we could face new competition from large
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international or domestic companies with established brands that enter our end markets. Demand for our
products may also be affected by our inability to respond to changes in design and functionality, to respond
to downward pricing pressure, and to provide shorter lead times for our products than our competitors.
There is also increasing use of data analytics, machine learning, and artificial intelligence software, which
our competitors may be able to use or implement more effectively than we are able to do. If we are unable to
respond successfully to these competitive pressures, we could lose market share, which could have an
adverse impact on our results. For further information, see “Item 1 — Business — Competition” of this
Annual Report on Form 10-K.
We rely on independent dealers and distribution partners, and the loss of these dealers and distribution
partners, or of any of our sales arrangements with significant private label, national, retail or equipment rental
customers, would adversely affect our business.
We depend on the services of independent distributors and dealers to sell and install our products and
provide service and aftermarket support to our end customers. Their capacity constraints and/or inability to
install and service our products, including their inability to hire, develop, or retain qualified technicians or
other labor, could limit our ability to maintain and grow our sales. We also rely on our distribution channels
to drive awareness for our product categories and our brands. In addition, we sell our products to end
users through private label arrangements with leading home equipment, electrical equipment and construction
machinery companies; arrangements with top retailers and equipment rental companies; and our direct
national accounts with telecommunications and other industrial customers. Our distribution agreements and
any contracts we have with large national, retail and other customers are typically not exclusive, and many
of the distributors with whom we do business also offer competitors’ products and services.
Impairment of our relationships with our distributors, dealers or large customers, loss of a substantial
number of these distributors or dealers or of one or more large customers, or an increase in our distributors’
or dealers’ sales of our competitors’ products to our customers or of our large customers’ purchases of our
competitors’ products could materially reduce our sales and profits. For example, we have had, and may
continue to have, disputes with one or more customers, distributors or dealers to whom we sell our products,
including clean energy products, and this may reduce or limit the sales growth for such products. Additionally,
our ability to successfully realize our growth strategy is dependent in part on our ability to identify, attract
and retain new distributors at all layers of our distribution platform, including increasing the number of
energy storage distributors, and we cannot be certain that we will be successful in these efforts. For further
information, see “Item 1 — Business — Distribution Channels and Customers” of this Annual Report on
Form 10-K.
We cannot guarantee that our share repurchase programs will be fully consummated or that they will enhance
long-term stockholder value. Share repurchases could also increase the volatility of the market price of our stock
and diminish our cash reserves.
On February 12, 2024, the Company’s Board of Directors (Board) approved the current stock repurchase
program that allows for the repurchase of up to $500 million of the Company’s common stock over a twenty-
four-month period. Although our Board has authorized such share repurchase program, the program does
not obligate us to repurchase any specific dollar amount or to acquire any specific number of shares. Such
program could also diminish our cash reserves. In addition, we may discontinue, modify or suspend our
share repurchase program based on several factors, including our cash balances and potential future capital
requirements for strategic transactions, including acquisitions, results of operations, financial condition
and other factors that our Board may deem relevant. Any modification, suspension, or termination of our
share repurchase program could cause our stock price to decline. We cannot guarantee that such program will
be fully consummated or that it will enhance long-term stockholder value.
Increased scrutiny regarding our sustainability practices and reporting could impact our reputation.
Increasing governmental and societal attention to sustainability matters, including expanding mandatory
and voluntary reporting, and disclosure topics such as climate change, natural resources, waste reduction,
energy, and risk oversight could expand the nature, scope, and complexity of matters that we are required to
control, assess, and report. We strive to deliver shared value through our business and our diverse
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stakeholders have evolving, varied and sometimes conflicting expectations regarding many aspects of our
business, including sustainability-related matters. We may be unsuccessful in achieving our sustainability
goals, on a timely basis or at all, or that the costs to achieve those goals become prohibitively expensive. We are
subject to regulatory requirements around sustainability-related disclosures, including the EU’s Corporate
Sustainability Reporting Directive, which may continue to evolve and may impose substantial additional costs
and require additional resources. Any actual or alleged failure to comply with regulatory requirements
could result in fines, penalties and civil liabilities, and damage to our reputation. Furthermore, if our
sustainability reporting and practices do not meet investor, regulator or other stakeholders’ expectations,
standards and requirements, our reputation, ability to attract or retain employees, and attractiveness as an
investment, business partner or acquiror could be negatively impacted. All of these could have an impact on
our reputation as well as our financial results and operations.
Risk factors related to our operations
The loss of any key members of our senior management team or key employees could disrupt our operations
and harm our business.
Our success depends, in part, on the efforts of certain key individuals, including the members of our
senior management team, who have significant experience in the energy products and solutions industry. If,
for any reason, our senior executives do not continue to be active in management, or if key employees
leave our company, our business, financial condition or results of operations could be adversely affected.
Failure to continue to attract or retain these individuals at reasonable compensation levels could have a
material adverse effect on our business, liquidity and results of operations. If we need to replace any of these
individuals in the near future, the loss of their services could disrupt our operations and have a material
adverse effect on our business if we do not have effective succession plans in place.
Disruptions caused by labor disputes or organized labor activities could harm our business.
We may from time-to-time experience union organizing activities in our non-union facilities. Disputes
with the current labor union or new union organizing activities could lead to work slowdowns or stoppages
and make it difficult or impossible for us to meet scheduled delivery times for product shipments to our
customers, which could result in loss of business. In addition, union activity could result in higher labor costs,
which could harm our financial condition, results of operations and competitive position. A work stoppage
or limitations on production at our facilities for any reason could have an adverse effect on our business,
results of operations and financial condition. In addition, many of our suppliers have unionized work forces.
Strikes or work stoppages experienced by our customers or suppliers could have an adverse effect on our
business, results of operations and financial condition.
Our business and operations can be adversely affected by our ability to attract, motivate, develop, and retain
our employees.
We are committed to attracting, motivating, developing, and retaining our employees to ensure we
remain an employer of choice. Despite our efforts, we have experienced, and could continue to experience,
depending upon external market conditions, higher employee turnover and absenteeism. Furthermore, the
market for skilled personnel is often very competitive both in markets where our facilities are located and
with the emergence of remote work. Increased turnover rates within our employee base, perceived or actual
deficiencies in total compensation paid to our employees in relation to competing employers, or as a
result of general macroeconomic factors or otherwise, could lead to increased costs, such as increased
overtime to meet demand and potentially further increase salaries and wage rates to attract and retain
employees, and could negatively affect our ability to efficiently operate our manufacturing facilities and
overall business. If we are unable to hire and retain employees capable of performing at a high level, our
business, financial condition and results of operations could be adversely affected.
We may experience material disruptions to our manufacturing operations.
While we seek to operate our facilities in compliance with applicable rules and regulations and take
measures to minimize the risks of disruption at our facilities, a material disruption at one of our
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manufacturing facilities could prevent us from meeting customer demand, reduce our sales and/or negatively
impact our financial results. Any of our manufacturing facilities, or any of our equipment within an
otherwise operational facility, could cease operations unexpectedly due to a number of events, including:
• equipment or information technology infrastructure failure;
• disruptions in the transportation infrastructure including roads, bridges, railroad tracks and
container ports;
• fires, floods, tornadoes, earthquakes, disease, pandemics, acts of violence, or other catastrophes; and
• other operational problems.
In addition, a significant portion of our manufacturing and production facilities are in Wisconsin
within a 100-mile radius of each other. We could experience prolonged periods of reduced production due
to unforeseen events occurring in or around our manufacturing facilities in Wisconsin. In the event of a
business interruption at our facilities, in particular our Wisconsin or South Carolina facilities, we may be
unable to shift manufacturing capabilities to alternate locations, accept materials from suppliers or meet
customer shipment needs, among other severe consequences. Such an event could have a material and adverse
impact on our financial condition and results of our operations.
Changes in U.S. trade policy, including the imposition of new or increased tariffs and the resulting consequences,
could have an adverse effect on our results of operations.
Our business benefits from free trade agreements, and efforts to withdraw from, or substantially
modify such agreements, in addition to the implementation of more restrictive trade policies, such as more
detailed inspections, higher tariffs, import or export licensing requirements, exchange controls or new barriers
to entry, could have a material adverse effect on our results of operations, financial condition or cash
flows. The U.S. government has made changes in U.S. trade policy over the past several years. These changes
include renegotiating and terminating certain existing bilateral or multi-lateral trade agreements, such as
the U.S.-Mexico-Canada Agreement, and initiating tariffs on certain foreign goods from a variety of countries
and regions, most notably China. These changes in U.S. trade policy have resulted in, and may continue to
result in, one or more foreign governments adopting responsive trade policies that make it more difficult or
costly for us to do business in or import our products or components from those countries. The sales,
gross margins, and profitability for each of our segments could be directly impacted by changes in tariffs
and trade agreements.
In addition, certain of our products or key components or raw materials have and may continue to be
subject to the imposition of higher duties as a result of anti-dumping and countervailing duties applied
against them. To the extent such governmental actions, duties or tariffs are applied to such products, it could
adversely affect our results of operations, financial condition and business.
We cannot predict the extent to which the U.S. or other countries will impose new or additional quotas,
duties, taxes or other similar restrictions upon the import or export of our products in the future, nor can
we predict future trade policy or the terms of any renegotiated trade agreements and their impact on our
business. The continuing adoption or expansion of trade restrictions, the occurrence of a trade war, or other
governmental action related to tariffs or trade agreements or policies has the potential to adversely impact
demand for our products, our costs, our customers, our suppliers, and the economy, which in turn could have
a material adverse effect on our business, operating results, and financial condition.
We may not realize all of the anticipated benefits of our acquisitions, divestitures, restructurings, or
realignments, or those benefits may take longer to realize than expected. We may also encounter significant
unexpected difficulties in integrating acquired businesses.
We regularly execute organizational changes such as acquisitions, divestitures, restructurings, and
realignments to support our growth and management strategies. If we are unable to successfully manage
these and other organizational changes, the ability to complete such activities and realize anticipated synergies
or cost savings, as well as our results of operations and financial condition, could be materially adversely
affected.
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Our ability to realize the anticipated benefits of our acquisitions will depend, to a large extent, on our
ability to integrate the acquired businesses with our business. The integration of independent businesses is a
complex, costly and time-consuming process. As a result, we may be required to devote significant
management attention and resources to integrating the business practices and operations of any acquired
businesses with ours. The integration process may disrupt our business and, if implemented ineffectively,
could preclude realization of the full benefits expected by us. Our failure to meet the challenges involved in
integrating an acquired business into our existing operations or otherwise to realize the anticipated benefits
of the transaction could cause an interruption of, or a loss of momentum in, our activities and could adversely
affect our results of operations.
As part of undertaking an acquisition, we may also significantly revise our capital structure or
operational budget, such as issuing common stock that would dilute the ownership percentage of our
stockholders, assuming liabilities or debt, utilizing a substantial portion of our cash resources to pay for the
acquisition or significantly increasing operating expenses. Our acquisitions have resulted in, and may in
the future result in, charges being taken in an individual quarter as well as future periods, which results in
variability in our quarterly earnings. In addition, our effective tax rate in any particular quarter may also be
impacted by acquisitions. Following the closing of an acquisition, we may also have disputes with the
seller regarding contractual requirements and covenants, purchase price adjustments, contingent payments
or for indemnifiable losses. Any such disputes may be time consuming and distract management from other
aspects of our business. As part of the terms of an acquisition, we may commit to pay additional contingent
consideration if certain revenue or other performance milestones are achieved. We are required to evaluate the
fair value of such commitments at each reporting date and adjust the amount recorded if there are changes
to the fair value.
In addition, the overall integration of our acquired businesses may result in material unanticipated
problems, expenses, liabilities, competitive responses, loss of customer relationships, and diversion of
management’s attention, and may cause our stock price to decline. The difficulties of combining the
operations of acquired businesses with ours include, among others:
• managing a larger company;
• maintaining employee morale and retaining key management and other employees;
• complying with newly applicable domestic and foreign regulations as we enter new product and
geographic markets;
• integrating two business cultures, which may prove to be incompatible;
• the possibility of faulty assumptions underlying expectations regarding the integration process;
• retaining existing customers and attracting new customers;
• consolidating corporate and administrative infrastructures and eliminating duplicative operations;
• the diversion of management’s attention from ongoing business concerns and performance shortfalls
as a result of management’s attention to the acquisition;
• unanticipated issues in integrating information technology, communications and other systems;
• complying with, or the failure to comply with, changes in applicable, new, or existing laws and
regulations;
• managing tax costs or inefficiencies associated with integrating the operations or supply chain of the
combined company;
• unforeseen liabilities, expenses or delays associated with the acquisition;
• difficulty comparing financial reports due to differing financial and/or internal reporting systems;
and
• making any necessary modifications to internal financial control systems to comply with the Sarbanes-
Oxley Act of 2002 and the rules and regulations promulgated thereunder.
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Many of these factors may be outside of our control and any one of them could result in increased
costs, decreases in the amount of expected revenues and diversion of management’s time and energy, which
could materially impact our business, financial condition and results of operations. In addition, even if
the operations of our acquired businesses are integrated successfully with our operations, we may not realize
the full benefits of the transaction, including the synergies, cost savings or sales or growth opportunities
that we expect. These benefits may not be achieved within the anticipated time frame, or at all, and additional
unanticipated costs may be incurred in the integration or management of our businesses. All these factors
could cause dilution to our earnings per share, decrease or delay the expected accretive effect of the acquisition,
and cause a decrease in the price of our common stock. As a result, we cannot be assured that the
combination of our acquisitions with our business will result in the realization of the full benefits anticipated
from the transaction.
A significant portion of our purchased components are sourced in foreign countries, exposing us to additional
risks that may not exist in the United States.
We source a significant portion of our purchased components overseas, primarily in Asia and Europe.
Our international sourcing subjects us to a number of potential risks in addition to the risks associated with
third-party sourcing generally. Such risks include:
• inflation or changes in political and economic conditions;
• logistical challenges, including extended container port congestion, and higher logistics costs;
• unstable regulatory environments;
• changes in import and export duties;
• domestic and foreign customs and tariffs;
• currency rate fluctuations;
• trade restrictions;
• labor or civil unrest;
• geopolitical conflict such as that experienced in Ukraine or the Middle East;
• disputes in our relationships with certain contract manufacturers or suppliers;
• communications challenges; and
• other restraints and burdensome taxes.
These factors have occurred in the past and are currently having an adverse effect on our ability to
efficiently and cost effectively source our purchased components overseas. Additionally, if the U.S. dollar
were to depreciate significantly against the currencies in which we purchase raw materials from foreign
suppliers, our cost of goods sold could increase materially, which would adversely affect our results of
operations.
Risk factors related to legal and regulatory matters
We are subject to a variety of litigation and other legal and regulatory proceedings in the course of our business
that could adversely affect our business, financial position or our results of operations.
We are subject to a variety of litigation and other legal and regulatory proceedings incidental to our
business (or the business operations of previously owned entities), including claims for damages arising out
of the use of products or services and claims relating to product design, safety, manufacture and
performance liability, contracts, commercial disputes, competition, sales and trading practices, employment
issues, environmental matters, intellectual property rights, tax, securities, regulatory compliance, personal
injury, insurance coverage, and acquisition-related matters, as well as other legal proceedings that arise in and
outside of the ordinary course of our business. These matters may include claims for compensatory
damages, punitive and consequential damages and/or injunctive relief. The defense of these matters may
divert our management’s attention, we may incur significant expenses in defending such matters, and we may
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be required to pay fines, penalties, damage awards or settlements or become subject to equitable remedies
that could adversely affect our operations and financial statements.
The industries in which we operate are also periodically reviewed or investigated by regulators, and we
are subject to and may continue to be subject to such investigations and claims, including by the U.S.
Department of Justice (DOJ), CPSC and EPA, which could lead to enforcement actions, fines and penalties
or the assertion of private litigation claims. While the Company cooperates with such governmental
inquiries, it is not possible to predict the outcome of such claims, investigations, and lawsuits. We could
incur judgments, fines or penalties or enter into settlements of lawsuits and claims that could have an adverse
effect on our reputation, business, results of operations or financial condition in any particular period.
Additionally, the nature of our operations means that legal and compliance risks will continue to
exist and additional legal proceedings and other contingencies, the outcome of which cannot be predicted
with certainty, may arise from time to time. In addition, subsequent developments in legal proceedings or
investigations may affect our assessment and estimates of loss contingencies recorded as a reserve and require
us to make payments in excess of our reserves, which could have an adverse effect on our reputation,
business and results of operations or financial condition.
Moreover, any insurance or indemnification rights that we may have may be insufficient or unavailable
to protect us against such losses. In addition, developments in proceedings in any given period may require
us to adjust the loss contingency estimates that we have recorded in our financial statements, record estimates
for liabilities or assets previously not susceptible to reasonable estimates or pay cash settlements or
judgments. Any of these developments could adversely affect our financial statements in any particular
period. We cannot assure our liabilities in connection with litigation and other legal and regulatory proceedings
will not exceed our estimates or adversely affect our financial statements and reputation.
While we maintain insurance coverage in amounts that we believe are reasonable, we cannot assure we
will be able to maintain this insurance on acceptable terms or that this insurance will provide sufficient
coverage against potential liabilities that may arise. Any product liability claim may also include the imposition
of punitive damages, the award of which may not be covered by insurance. Any claims brought against us,
with or without merit, may have an adverse effect on our business and results of operations as a result of
potential adverse outcomes, the expenses associated with defending such claims, the diversion of our
management’s resources and time and the potential adverse effect to our business reputation.
For further information, see Note, “18. Commitments and Contingencies” and our discussion of “Non-
GAAP measures — Adjusted EBITDA” in Item 7 of this Annual Report on Form 10-K.
Our operations are subject to various environmental, health and safety laws and regulations, and non-compliance
with or liabilities under such laws and regulations could result in substantial costs, fines, sanctions and claims.
Our operations are subject to a variety of foreign, federal, state and local environmental, health and
safety laws and regulations including those governing, among other things, emissions to air; discharges to
water; noise; and the generation, handling, storage, transportation, treatment and disposal of waste and other
materials. In addition, under federal and state environmental laws, we could be required to investigate,
remediate and/or monitor the effects of the release or disposal of materials both at sites associated with past
and present operations and at third-party sites where waste generated by our operations was disposed.
This liability may be imposed retroactively and whether or not we caused, or had any knowledge of, the
existence of these materials and may result in our paying more than our fair share of the related costs.
Violations of or liabilities under such laws and regulations could result in substantial costs, fines and civil or
criminal proceedings or personal injury and workers’ compensation claims.
Our products are subject to government regulation.
Our products are subject to extensive statutory and regulatory requirements governing, among other
things, emissions, noise, labeling, transport, product content and composition, product safety, and data
privacy, including standards imposed by the EPA, CARB, CPSC and other regulatory agencies and
certification bodies around the world. Also, as we increase our connectivity with our products and customers,
we may be required to comply with additional data privacy and cybersecurity regulations. For example,
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personal privacy and data security have become significant issues in the United States, Europe, and in many
other jurisdictions in which we operate. The regulatory framework for privacy and security issues worldwide
is rapidly evolving and is likely to remain uncertain for the foreseeable future. In the United States, these
include rules and regulations promulgated or pending under the authority of federal agencies, state
attorneys general, legislatures, and consumer protection agencies. Internationally, many jurisdictions in
which we operate have established their own data security and privacy legal framework with which we,
relevant suppliers, and customers must comply. Although we have implemented certain policies, procedures,
and, in other cases, contractual arrangements designed to facilitate compliance with applicable privacy
and data security laws and standards, any challenges or perceived inability to adequately address privacy
and security concerns, even if unfounded, or comply with applicable privacy and data security laws,
regulations, and policies, could result in additional fines, costs, and liabilities to us, damage our reputation,
inhibit sales, and adversely affect our business.
The laws affecting our products are constantly evolving and many are becoming increasingly stringent.
As a further example, CARB regulations that will prohibit future sales in California of certain small off-
road engines may negatively affect the long-term sales of certain products we sell today in that state. Changes
in applicable laws or regulations, or in the enforcement thereof, could require us to redesign or recall our
products and could adversely affect our business or financial condition in the future. Developing and
marketing products to meet such new requirements could result in substantial additional costs that may be
difficult to recover in some markets. In some cases, we may be required to modify our products or develop new
products to comply with new regulations, particularly those relating to air emissions and carbon monoxide.
Typically, additional costs associated with significant compliance modifications are passed on to the
customer.
The failure to comply with existing and future regulatory or product standards or requirements could
adversely affect our position in the markets we serve, our reputation, business, results of operations or
financial condition in any particular period.
Risk factors related to cybersecurity
Failures or security breaches of our networks or information technology systems could have an adverse effect
on our business.
We rely heavily on information technology (IT) both in our products and services for customers and in
our IT systems used to run our business. Further, we collect and store sensitive information in cloud-based
data centers and on our networks. Government agencies and security experts have warned about growing risks
of hackers, cyber-criminals, malicious insiders and other actors targeting confidential information and all
types of IT systems. These actors may engage in fraudulent activities, theft of confidential or proprietary
information and sabotage or ransomware.
We may experience interruptions, delays and outages in service and availability from time to time,
including infrastructure changes, human or software errors, upgrade disruptions and capacity constraints.
Our IT systems, our connected products, and our confidential information may be vulnerable to damage or
intrusion from a variety of attacks including computer viruses, worms or other malicious software
programs. The risk of such attacks may increase as we integrate newly acquired companies or develop new
connected products and related software. These attacks pose a risk to the security of our products, private
data, systems and networks and those of our customers, suppliers and third-party service providers, as
well as to the confidentiality of our information and the integrity and availability of our data. Use of artificial
intelligence software may also create risks from the unintentional disclosure of proprietary, confidential,
personal or otherwise sensitive information. While we attempt to mitigate these risks through board oversight,
hiring additional internal cyber-security professionals to manage these risks, enhancing controls, due
diligence, employee training and communication, third party intrusion testing, system hardening, email and
web filters, regular patching, multi-factor authentication, surveillance, encryption, and other measures, we
remain vulnerable to information security threats.
We monitor certain cyber security threats and vulnerabilities in our systems, and we have experienced
viruses and attacks targeting our IT systems and networks. Such prior events, to date, have not had a material
impact on our financial condition, results of operations or liquidity. Despite the precautions we take, we
29
have had, and could have again, an intrusion or infection of our systems or connected products. An attack
on our IT systems or connected products could result in theft or disclosure of trade secrets or other intellectual
property, a breach of confidential customer or employee information, or product failure or misuse. Any
such events could have an adverse impact on sales, harm our reputation and cause us to incur legal liability
and increased costs to address such events and related security concerns. As the threats evolve and become
more potent, we may incur additional costs to secure the products that we sell, as well as our data and
infrastructure of networks and devices.
See “Item 1C. Cybersecurity” of this Annual Report on Form 10-K for additional information related
to cybersecurity risks.
Risk factors related to our capital structure
We have indebtedness which could adversely affect our cash flow and our ability to make payments on our
indebtedness.
As of December 31, 2024, we had total indebtedness of $1,334.2 million. Our level of indebtedness
increases the possibility that we may be unable to generate sufficient cash to pay, when due, the principal of,
interest on or other amounts due in respect of our indebtedness. While we maintain interest rate swaps
covering a portion of our outstanding debt, our interest expense could increase if interest rates increase
because debt under our credit facilities bears interest at a variable rate based on Secured Overnight Financing
Rate (SOFR) or other base rate. If we do not have sufficient earnings to service our debt, we may be
required to refinance all or part of our existing debt, sell assets, borrow more money or sell securities, none
of which we can guarantee we can accomplish. Our Tranche B Term Loan Facility matures on July 3, 2031,
and our Tranche A Term Loan Facility as well as our Revolving Facility mature on June 29, 2027.
The terms of our credit facilities restrict our current and future operations, particularly our ability to respond
to changes in our business or to take certain actions.
Our credit facilities contain, and any future indebtedness of ours or our subsidiaries would likely
contain, a number of restrictive covenants that impose operating and financial restrictions on us and our
subsidiaries, including limitations on our ability to engage in acts that may be in our best long-term interests.
These restrictions set limitations on, among other things, our ability to:
• incur liens;
• incur or assume additional debt or guarantees or issue preferred stock;
• pay dividends, or make redemptions and repurchases, with respect to capital stock;
• prepay, or make redemptions and repurchases of, subordinated debt;
• make loans and investments;
• make capital expenditures;
• engage in mergers, acquisitions, asset sales, sale/leaseback transactions and transactions with
affiliates;
• change the business conducted by us or our subsidiaries; and
• amend the terms of subordinated debt.
The operating and financial restrictions in our credit facilities and any future financing agreements
may adversely affect our ability to finance future operations or capital needs or to engage in other business
activities. A breach of any of the restrictive covenants in our credit facilities would result in a default. If any
such default occurs, the lenders under our credit facilities may elect to declare all outstanding borrowings,
together with accrued interest and other fees, to be immediately due and payable, or enforce their security
interest, any of which would result in an event of default. The lenders will also have the right in these
circumstances to terminate any commitments they have to provide further borrowings.
30
We may need additional capital to finance our growth strategy or to refinance our existing credit facilities, and
we may not be able to obtain it on acceptable terms, or at all, which may limit our ability to grow.
We may require additional financing to expand our business. Financing may not be available to us or
may be available to us only on terms that are not favorable. The terms of our senior secured credit facilities
limit our ability to incur additional debt. In addition, economic conditions, including a downturn in the credit
markets, could impact our ability to finance our growth on acceptable terms or at all. If we are unable to
raise additional funds or obtain capital on acceptable terms, we may have to delay, modify or abandon some
or all of our growth strategies. In the future, if we are unable to refinance our credit facilities on acceptable
terms, our liquidity and operating results could be adversely affected.
Our total assets include a substantial amount of goodwill and other indefinite-lived intangibles. If we determine
these have become impaired, our net income could be materially adversely affected.
Goodwill represents the excess of cost over the fair market value of net assets acquired in business
combinations. Indefinite-lived intangibles are comprised of certain tradenames. As of December 31, 2024,
goodwill and other indefinite-lived intangibles totaled $1,563.5 million. We review goodwill and other
intangibles at least annually for impairment and any excess in carrying value over the estimated fair value is
charged to the statement of comprehensive income. Future impairment may result from, among other
things, deterioration in the performance of an acquired business or product line, adverse market conditions,
a significant increase in interest rate, changes in the competitive landscape, adverse changes in applicable
laws or regulations, including changes that restrict the activities of an acquired business or product line, and
a variety of other circumstances including any of the risk factors noted above. A reduction in net income
resulting from the write-down or impairment of goodwill or indefinite-lived intangibles could have a material
adverse effect on our financial statements.
General risk factors
The market price of our common stock may be volatile or may decline regardless of our operating performance.
The market price of our common stock has been and could be subject to wide fluctuations in response
to, among other things, the other risk factors described herein, and other factors beyond our control, such
as quarterly variations in operating results, announcements of technology innovations or new products by us
or our competitors, changes in financial estimates and recommendations by securities analysts, the operating
and stock price performance of other companies that investors may deem comparable to us, and news
reports relating to trends in our markets or general economic conditions. These fluctuations often have been
unrelated or disproportionate to the operating performance of those companies. These broad market and
industry fluctuations, as well as general economic, political and market conditions, such as recessions, interest
rate changes or international currency fluctuations, may negatively affect the market price of our common
stock, regardless of our operating performance.
We have experienced and may continue to see volatility in the market price of our stock price. We have
been subject to securities class action litigation relating to the market price of our stock, and may continue
to be the target of this type of litigation in the future. Securities litigation against us could result in substantial
costs and divert our management’s attention from other business concerns, which could seriously harm
our business.
For further information, see Note, “18. Commitments and Contingencies” and our discussion of “Non-
GAAP measures — Adjusted EBITDA” in Item 7 of this Annual Report on Form 10-K.
Our business is subject to potential tax liabilities.
We are subject to income tax, indirect tax or other tax claims by tax agencies in jurisdictions in which
we conduct business. In the ordinary course of our business, there are many transactions and calculations
where the ultimate income tax, indirect tax, or other tax determination is uncertain. Although we believe our
tax estimates are reasonable, we cannot be certain that the final determination of our tax audits and
litigation will not be materially different from that which is reflected in historical tax provisions and accruals.
31
Should additional taxes be assessed as a result of an audit, assessment or litigation, there could be a
material adverse effect on our cash, tax provisions and net income in the period or periods for which that
determination is made.
Item 1B.
Unresolved Staff Comments
None.
Item 1C.
Cybersecurity
The Company’s management and Board recognize the importance of strong oversight of cybersecurity
risk, information security and technology in maintaining the trust and confidence of our customers, partners,
employees and stockholders. Our processes for assessing, identifying and managing material risks from
cybersecurity threats is incorporated into our Enterprise Risk Management (ERM) program in a similar
fashion to other legal, compliance, operational, and financial risk areas. The Company maintains cybersecurity
measures aligned with the National Institute of Standards and Technology Cybersecurity Framework
(Framework) which organizes cybersecurity risks into six categories: identify, protect, detect, respond, recover
and govern, and looks to other standards as well to help identify, assess, and manage cybersecurity risks
relevant to our business.
Our Chief Information Officer (CIO) oversees our information systems and cybersecurity function and
reports to our Chief Executive Officer (CEO). He has over 20 years of experience in leading information
systems management, strategy, and operational execution, including incident prevention, management, and
response. Our Company’s Chief Information Security Officer (CISO) is responsible for developing and
implementing our information security program and reports to our CIO. The CISO has over 25 years of
experience supporting cybersecurity and information technology. They are supported by a direct and cross-
functional team of professionals with expertise and experience in threat assessment and detection,
mitigation strategies, incident response, training, and regulatory compliance.
In addition, we have established a Cybersecurity Steering Committee comprised of members of
executive leadership. The Steering Committee, in which our CIO and CISO participate, meets regularly and
has established Company-wide policies and standards concerning cybersecurity matters. These policies
cover areas such as malware protection, remote access, multifactor authentication, containment of confidential
information and the use of the internet, email and wireless devices. We have an established incident
response plan led by our CIO and CISO and depending on the nature and severity of the incident, requires
escalating notifications up to our CEO and Board.
Our Board oversees our enterprise risk management activities. The Board receives periodic updates on
our cybersecurity risk management program as well as regular updates and education on relevant legislation
and trends related to cybersecurity. Our Audit Committee assists the Board in its oversight role and
receives regular reports from management on the Company’s information systems and cybersecurity
program. Several members of our Board’s Audit Committee have expertise and experience in cybersecurity,
and one director is the President of a major cybersecurity services provider.
The CISO and information technology security team conduct regular risk assessments to assess the
overall technology infrastructure and related business processes, identify and address potential security gaps
and vulnerabilities, and identify areas requiring additional focus. These risk assessments extend to our
supply chain, where cybersecurity health assessments are employed for our critical suppliers. The results are
used to calculate a Cybersecurity Risk Score, a key component of our Supply Chain Scorecard used to
proactively identify and manage potential risks. Additionally, we require certain third parties that could
introduce significant cybersecurity risk to us to agree by contract to manage their cybersecurity risks in
specified ways, as appropriate. Risk assessments are also performed on new products and software as part of
our new product development process.
As part of our risk assessments, we engage third-party services for network penetration testing and
security evaluations, conduct annual incident response table-top exercises, and perform regular testing of
controls related to our financial information systems by our Internal Audit function.
32
In order to promote a culture of security awareness across our organization, all employees are required
to complete an annual cybersecurity awareness training and are provided with periodic information updates
on cybersecurity threats. We also maintain cyber insurance policies to help partially mitigate the financial
impact of a significant cybersecurity incident.
Despite our best efforts, we cannot guarantee that our security measures will prevent all potential
cybersecurity incidents or breaches. Our systems are continually subject to sophisticated and evolving cyber
threats, such as phishing, ransomware, social engineering, and advanced persistent threats. However, to
date, we have not been subject to any incidents or successful cyber-attacks that have materially impacted our
operations or financial condition. The Company has invested in developing and acquiring cybersecurity
capabilities allowing us to monitor threats and manage incident response. We have also developed internal
policies to mitigate cybersecurity incidents, including providing clear guidelines for incident classification,
escalation, and response. We recognize the importance of continued monitoring and improvement of our
cybersecurity program, and will continue to evolve our security controls, incident response capabilities,
and third-party vendor management protocols.
For additional information on the cybersecurity risks that we face, also see Item 1A. “Risk Factors” of
this Annual Report on Form 10-K.
Item 2.
Properties
We own or lease manufacturing, distribution, R&D, and office facilities globally totaling over seven
million square feet. We also utilize third party inventory warehouses that accommodate material storage
and rapid response requirements of our customers. The following table provides information about our
principal owned or leased facilities exceeding 20,000 square feet:
Location
Owned/
Leased
Activities
Segment
Waukesha, WI
Owned
Corporate headquarters, R&D
Domestic
Pewaukee, WI
Owned
Sales, office
Domestic
Eagle, WI
Owned
Manufacturing, office, training
Domestic
Whitewater, WI
Owned
Manufacturing, office, warehouse
Domestic
Oshkosh, WI
Owned
Manufacturing, office, warehouse, R&D
Domestic
Berlin, WI
Owned
Manufacturing, office, warehouse, R&D
Domestic
Fond du Lac, WI
Leased
Warehouse
Domestic
Jefferson, WI
Owned
Manufacturing, office, distribution, R&D
Domestic
Jefferson, WI
Leased
Storage, distribution
Domestic
Janesville, WI
Leased
Distribution
Domestic
Richfield, WI
Leased
Storage, distribution
Domestic
Trenton, SC
Owned
Manufacturing, office, warehouse,
distribution
Domestic
Stockton, CA
Leased
Sales, office, warehouse, training
Domestic
Corona, CA
Leased
Sales, office, storage
Domestic
Hamilton, OH
Leased
Storage
Domestic
Maquoketa, IA
Owned
Storage, rental property
Domestic
South Burlington, VT
Leased
Office, sales, R&D
Domestic
South Portland, ME
Leased
Sales, office, R&D
Domestic
Marlborough, MA
Leased
Sales, office, warehouse
Domestic
Reno, NV
Leased
Warehouse, R&D
Domestic
Toronto, Canada
Leased
Office, sales, R&D
Domestic
Mexico City, Mexico
Owned
Storage
International
33
Location
Owned/
Leased
Activities
Segment
Hidalgo, Mexico
Owned
Manufacturing, sales, distribution,
warehouse, office, R&D
International
Casole d’Elsa, Italy
Owned
Manufacturing, office, warehouse, R&D
International
Balsicas, Spain
Leased
Manufacturing, office, warehouse, R&D
International
Foshan, China
Owned
Manufacturing, office, warehouse, R&D
International
Saint-Nizier-sous-Charlieu,
France
Leased
Sales, office, warehouse
International
Cravinhos, Brazil
Leased
Manufacturing, office, warehouse
International
Sydney, Australia
Leased
Sales, office, warehouse
International
Fellbach, Germany
Leased
Sales, office, warehouse
International
Pfullingen, Germany
Leased
Manufacturing, sales, distribution,
warehouse, office, R&D
International
Suzhou, China
Leased
Office, R&D
International
Rugby, United Kingdom
Leased
Manufacturing, office, warehouse, R&D
International
Staffordshire, United Kingdom
Leased
Warehouse, Office
International
Hunmanby, United Kingdom
Owned
Manufacturing, warehouse, sales,
distribution, office, R&D
International
Celle, Germany
Owned
Manufacturing, office, warehouse, R&D,
sales
International
Kolkata, India
Leased
Manufacturing, warehouse
International
In addition to the countries represented above, the Company operates small facilities in the United
Arab Emirates, Romania, Bahrain, and Colombia.
As of December 31, 2024, substantially all of our domestically-owned and a portion of our
internationally-owned properties are subject to collateral provisions under our senior secured credit
facilities.
Item 3.
Legal Proceedings
See Note 18, “Commitments and Contingencies,” to the consolidated financial statements in Item 8 of
this Annual Report on Form 10-K for further information on the Company’s legal proceedings.
Item 4.
Mine Safety Disclosures
Not Applicable.
34
PART II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
Shares of our common stock are traded on the New York Stock Exchange (NYSE) under the symbol
“GNRC.”
Purchases of Equity Securities By the Issuer and Affiliated Purchasers
The following table summarizes the stock repurchase activity for the three months ended December 31,
2024, which consisted of the withholding of shares upon the vesting of restricted stock awards to pay related
withholding taxes on behalf of the recipient:
Total Number
of Shares
Purchased
Average Price
Paid per Share
Total Number
Of Shares
Purchased As
Part Of
Publicly
Announced
Plans Or
Programs
Approximate
Dollar Value Of
Shares That
May Yet Be
Purchased
Under The
Plans Or
Programs
10/01/24 – 10/31/24 . . . . . . . . . . . . . . . . . . . . .
830
$158.40
—
$347,256,871
11/01/24 – 11/30/24 . . . . . . . . . . . . . . . . . . . . .
260
$169.93
—
$347,256,871
12/01/24 – 12/31/24 . . . . . . . . . . . . . . . . . . . . .
23,094
$189.67
—
$347,256,871
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24,184
$188.39
For equity compensation plan information, refer to Note 17, “Share Plans,” to the consolidated
financial statements in Item 8 of this Annual Report on Form 10-K. For information on the Company’s
stock repurchase plans, refer to Note 13, “Stock Repurchase Programs,” to the consolidated financial
statements in Item 8 of this Annual Report on Form 10-K.
Stock Performance Graph
The line graph below compares the cumulative total stockholder return on our common stock with the
cumulative total return of the Standard & Poor’s (S&P 500) Index, the S&P MidCap 400 Index, and the
S&P 500 Industrial Index, for the five-year period ended December 31, 2024. The graph and table assume
$100 was invested on December 31, 2019, in each of our common stock, the S&P 500 Index, the S&P
MidCap 400 Index, and the S&P 500 Industrial Index, and that all dividends were reinvested. Cumulative
total stockholder returns for our common stock, the S&P 500 Index, the S&P MidCap 400 Index, and the
S&P 500 Industrial Index, are based on our fiscal year.
35
COMPARISON OF CUMULATIVE TOTAL RETURN
$400
$200
$300
$100
$0
12/31/2019
ASSUMES $100 INVESTED ON DEC. 31, 2019
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING DEC. 31, 2024
12/31/2020
12/31/2024
12/31/2022
12/31/2023
12/31/2021
Generac Holdings Inc.
S&P 500 Index – Total Return
S&P MidCap 400 Index
S&P 500 Industrials Index
Company / Market / Peer Group
12/31/2019
12/31/2020
12/31/2021
12/31/2022
12/31/2023
12/31/2024
Generac Holdings Inc. . . . . . . . . . . .
$100.00
$226.04
$349.76
$100.03
$128.42
$154.04
S&P 500 Index – Total Returns . . . . .
100.00
118.40
152.39
124.79
157.59
197.02
S&P MidCap 400 Index . . . . . . . . . .
100.00
113.66
141.80
123.28
143.54
163.54
S&P 500 Industrials Index . . . . . . . . .
100.00
111.06
134.52
127.15
150.20
176.44
Holders
As of February 14, 2025, there were 921 registered holders of record of Generac’s common stock. A
substantially greater number of holders of Generac common stock are “street name” or beneficial holders,
whose shares are held of record by banks, brokers and other financial institutions.
Dividends
We do not have plans to pay dividends on our common stock in the foreseeable future. However, in the
future, subject to factors such as general economic and business conditions, our financial condition and
results of operations, our capital requirements, our future liquidity and capitalization, and other such factors
that our Board may deem relevant, we may change this policy and choose to pay dividends. Our ability to
pay dividends on our common stock is currently limited by the terms of our senior secured credit facilities and
may be further restricted by any future indebtedness we incur. Dividends from, and cash generated by our
subsidiaries will be our principal sources of cash to repay indebtedness, fund operations, repurchase shares of
common stock and pay dividends. Accordingly, our ability to pay dividends to our stockholders is dependent
on the earnings and distributions of funds from our subsidiaries.
Securities Authorized for Issuance Under Equity Compensation Plans
For information on securities authorized for issuance under our equity compensation plans, refer to
Note 17, “Share Plans,” and “Item 12 — Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters,” of this Annual Report on Form 10-K which is incorporated herein by
reference.
Recent Sales of Unregistered Securities
None.
Use of Proceeds from Registered Securities
Not applicable.
36
Item 6.
[Reserved]
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be
read together with “Item 1 — Business,” the consolidated financial statements, and the related notes thereto
in Item 8 of this Annual Report on Form 10-K. This discussion contains forward-looking statements,
based on our expectations at the time of filing this Annual Report on Form 10-K and related to future events
and our future financial performance, that involve risks and uncertainties. Our actual results may differ
materially from those anticipated in these forward-looking statements as a result of many factors, including
those set forth under “Item 1A. — Risk Factors.” of this Annual Report on Form 10-K.
Overview
Generac is a total energy solutions company that empowers people to use energy on their own terms.
Founded in 1959, Generac is a leading global designer, manufacturer, and provider of a wide range of energy
technology solutions. The Company provides power generation equipment, energy storage systems, energy
management devices & solutions, and other power products serving the residential, light commercial, and
industrial markets. The Company continues to expand its energy technology offerings for homes and
businesses in its mission to Power a Smarter World and lead the evolution to more resilient, efficient, and
sustainable energy solutions.
Further information regarding our business is provided in “Part I, Item 1. Business” of this Annual
Report on Form 10-K.
Business Drivers and Operational Factors
“Part I, Item 1. Business” of this Annual Report on Form 10-K contains information regarding
business drivers, including key mega-trends and strategic growth themes under the subheading “Mega-
Trends, Strategic Growth Themes, and Additional Business Drivers.”
Factors Affecting Results of Operations
We are subject to various factors that can affect our results of operations, which we attempt to mitigate
through factors we can control, including continued product development, expanded distribution, pricing,
cost control, and hedging. Certain operational and other factors that affect our business include the following:
Effect of commodity, currency, component price fluctuations, and resource availability.
Industry-wide
price fluctuations of key commodities, such as steel, copper and aluminum, along with other components
we use in our products, as well as changes in labor costs required to produce our products, can have a material
impact on our results of operations. Acquisitions in recent years have increased our use of advanced
electronic components and battery cells, as well as further expanded our commercial and operational presence
outside of the United States. Our international acquisitions, along with our existing global supply chain,
expose us to fluctuations in foreign currency exchange rates and regulatory tariffs that can also have a material
impact on our results of operations.
We have historically attempted to mitigate the impact of any inflationary pressures through improved
product design and sourcing, manufacturing efficiencies, price increases, and select hedging transactions.
Our results are also influenced by changes in fuel prices in the form of freight rates, which in some cases are
accepted by our customers and in other cases are paid by us.
Seasonality.
Although there is demand for our products throughout the year, in each of the past
five years, approximately 19% to 25% of our net sales occurred in the first quarter, 22% to 28% in the
second quarter, 24% to 28% in the third quarter and 23% to 31% in the fourth quarter, with different
seasonality depending primarily on the occurrence, timing and severity of major power outage activity in
each year. Major outage activity is unpredictable by nature and, as a result, our sales levels and profitability
may fluctuate from period to period. The seasonality experienced during a major power outage, and for
the subsequent quarters following the event, will vary relative to other periods where no major outage events
occurred.
37
Acquisitions.
Over the years, we have executed a number of acquisitions that support our strategic
plan. A summary of the recent acquisitions can be found in Note 1, “Description of Business” to the
consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.
Factors Influencing Interest Expense
Interest expense can be impacted by a variety of factors, including market fluctuations in SOFR,
interest rate election periods, interest rate swap agreements, repayments or borrowings of indebtedness, and
amendments to our credit agreements. In connection with our credit agreement amendment in June 2022,
SOFR became the new benchmark interest rate for the new Tranche A Term Loan Facility and the Revolving
Facility, and all LIBOR provisions in the existing Tranche B Term Loan Facility were replaced with SOFR
provisions. Refer to Note 12, “Credit Agreements,”to the consolidated financial statements included in Item 8
of this Annual Report on Form 10-K for further information. The decrease in interest expense in the
current year was primarily driven by lower borrowings and lower SOFR interest rates during the year.
Factors Influencing Provision for Income Taxes and Cash Income Taxes Paid
The effective income tax rates for the years ended December 31, 2024 and 2023 were 22.6% and 25.2%,
respectively. The decrease in our 2024 effective tax rate was primarily due to unfavorable discrete tax items
in the prior year that did not repeat in the current year, as well as favorable earnings mix with higher earnings
in lower tax jurisdictions in the current year.
On August 16, 2022, the U.S. government enacted the Inflation Reduction Act (the Act). The Act in
part provides funding and tax incentives for certain clean energy products and projects. While the Act did
not have a material impact on the financial results of the current period, we will continue to review the Act
and any regulations or guidance issued by the U.S. Treasury Department or by a state which may provide a tax
benefit or expense. We will also monitor any changes to the Act under the new policy environment.
In 2021, the Organization for Economic Cooperation and Development (OECD) released Pillar Two
Global Anti-Base Erosion model rules, designed to ensure large corporations are taxed at a minimum rate
of 15% in all countries of operation. The OECD continues to release guidance and countries are implementing
legislation to adopt the rules, some of which became effective on January 1, 2024. The United States has
not yet enacted legislation implementing Pillar Two. We are continuing to evaluate the Pillar Two rules and
their potential impact on future periods. There was no impact to the financial results of the year ended
December 31, 2024, and we do not expect the rules to have a material impact on our effective tax rate for
the following year. We will update our future tax provisions based on new regulations or guidance accordingly.
Components of Net Sales and Expenses
Net Sales
Our net sales primarily consist of the sale of products to our customers. This includes sales of our
power generation equipment, energy storage systems, and other power products to the residential, commercial
and industrial markets, as well as service parts to our dealer network. Net sales also include shipping and
handling charges billed to customers, with the related freight costs included in cost of goods sold. Additionally,
we offer other services, including extended warranties, installation, maintenance, data center and telecom
facility design and build, remote monitoring, and grid services to utilities in certain circumstances. These
services accounted for less than 4% of our net sales for the year ended December 31, 2024. Refer to Note 2,
“Summary of Accounting Policies — Revenue Recognition,” to the consolidated financial statements in
Item 8 of this Annual Report on Form 10-K for further information on our revenue streams and related
revenue recognition accounting policies.
We are not dependent on any one channel or customer for our net sales, with no single customer
representing more than 5% of our net sales, and our top ten customers representing less than 16% of our
net sales in aggregate for the year ended December 31, 2024.
Costs of Goods Sold
The principal elements of costs of goods sold are component parts, raw materials, inbound and
outbound freight, factory overhead and labor. The principal component parts are engines, alternators,
38
batteries, electronic controls, and steel enclosures. We design and manufacture air-cooled engines for certain
of our generators up to 26kW, along with certain liquid-cooled, natural gas engines. We source engines for
certain of our smaller products and all of our diesel products. For certain natural gas engines, we source the
base engine block, and then add a significant amount of value engineering, sub-systems and other content
to the point that we are recognized as the original equipment manufacturer (OEM) of those engines. We
design and manufacture many of the alternators for our generators. We also manufacture other generator
components where we believe we have a design and cost advantage. We source component parts from an
extensive global network of reliable, high-quality suppliers. In some cases, these relationships are proprietary.
For certain energy technology products, we source these products complete from certain contract
manufacturers using our designs.
The principal sourced raw materials used in the manufacturing process are steel, copper and aluminum.
We are susceptible to fluctuations in the cost of these commodities, impacting our costs of goods sold. We
seek to mitigate the impact of commodity price changes on our business through a continued focus on global
sourcing, product design improvements, manufacturing efficiencies, price increases and select hedging
transactions. We are also impacted by foreign currency fluctuations given our global supply chain. There is
typically a lag between raw material price fluctuations and their effect on our costs of goods sold.
Our results are also influenced by changes in fuel prices in the form of freight rates, which in some cases
are accepted by our customers and in other cases are paid by us.
The balance of cost of goods sold include our manufacturing and warehousing facilities, factory
overhead, labor and shipping costs. Factory overhead includes utilities, insurance, support personnel,
depreciation, general supplies, and maintenance. Although we attempt to maintain a flexible manufacturing
cost structure, our margins can be impacted if we cannot timely adjust labor and manufacturing costs to
match fluctuations in net sales.
Operating Expenses
Our operating expenses consist of costs incurred to support our sales, marketing, distribution, service
parts, warranty, engineering, information systems, human resources, accounting, finance, risk management,
legal and tax functions, among others. These expenses include, among others, personnel costs such as
salaries, bonuses, employee benefit costs, payroll taxes, and share-based compensation cost, and are classified
into three categories: selling and service, research and development, and general and administrative.
Additionally, the amortization expense related to our finite-lived intangible assets is included within operating
expenses.
Selling and service.
Our selling and service expenses consist primarily of personnel costs, marketing
expense, standard assurance warranty expense, bad debt provisions, and other sales expenses. Our personnel
costs recorded in selling and services expenses include the expense of our sales force, customer support
teams, outbound shipping and distribution functions, and other personnel involved in the marketing, sales
and service of our products. Standard warranty expense is estimated based on historical trends or based on
specific warranty matters as they become known and reasonably estimable. Our marketing expenses
include media advertising, promotional expenses, co-op advertising costs, direct mail costs, printed material
costs, product display costs, market research expenses, and trade show expenses. Marketing expenses are
generally related to the launch of new product offerings, opportunities to create market awareness for our
products, and general brand awareness marketing efforts. Our marketing campaigns are an important source
for lead generation.
Research and development.
Our research and development expenses include mechanical engineering,
electronics engineering, and software development costs and support numerous projects covering all of our
product lines. They also support our connectivity, grid services, remote monitoring, and energy management
initiatives. We operate engineering facilities with extensive capabilities at many locations around the world
with a focus on new product development, existing product improvement and cost containment. We are
committed to innovation, research and development and rely on a combination of patents and trademarks
to establish and protect our proprietary rights. Our research and development costs are expensed as incurred.
General and administrative.
Our general and administrative expenses include personnel costs for
accounting, information technology, human resources, legal, general and administrative employees; legal
39
and professional services fees; information technology costs; insurance; travel and entertainment expense;
adjustments to contingent acquisition consideration; share-based compensation costs; and other corporate
expenses.
Amortization of intangibles.
Our amortization of intangibles expense includes the straight-line
amortization of finite-lived tradenames, customer lists, patents and technology, and other intangibles assets.
Other (Expense) Income
Other (expense) income includes the interest expense on our outstanding borrowings, amortization of
deferred financing costs and original issue discount, credit facility commitment fees, and interest accretion
on contingent acquisition consideration. Other (expense) income also includes other financial items such as
losses on extinguishment of debt, investment income earned on our cash and cash equivalents, gains/
losses on the sale of certain investments, and changes in the fair value of our investment in Wallbox N.V.
warrants and equity securities.
Results of Operations
A detailed discussion of the year-over-year changes from the Company’s fiscal 2022 results of operations
to fiscal 2023 results of operations can be found in the Management’s Discussion and Analysis section of
the Company’s fiscal 2023 Annual Report on Form 10-K filed February 21, 2024.
Year ended December 31, 2024 compared to year ended December 31, 2023
The following table sets forth our consolidated statement of operations data for the periods indicated:
Year Ended December 31,
(U.S. Dollars in thousands)
2024
2023
$ Change
% Change
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$4,295,834
$4,022,667
$273,167
6.8%
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,630,208
2,657,236
(27,028)
-1.0%
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,665,626
1,365,431
300,195
22.0%
Operating expenses:
Selling and service . . . . . . . . . . . . . . . . . . . . . . . . . .
526,446
448,199
78,247
17.5%
Research and development . . . . . . . . . . . . . . . . . . . .
219,600
173,443
46,157
26.6%
General and administrative . . . . . . . . . . . . . . . . . . . .
285,095
253,396
31,699
12.5%
Amortization of intangible assets . . . . . . . . . . . . . . .
97,743
104,194
(6,451)
-6.2%
Total operating expenses . . . . . . . . . . . . . . . . . . . . . . .
1,128,884
979,232
149,652
15.3%
Income from operations
. . . . . . . . . . . . . . . . . . . . . . .
536,742
386,199
150,543
39.0%
Total other expense, net . . . . . . . . . . . . . . . . . . . . . . . .
(127,304)
(95,899)
(31,405)
-32.7%
Income before provision for income taxes . . . . . . . . . . .
409,438
290,300
119,138
41.0%
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . .
92,460
73,180
19,280
26.3%
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
316,978
217,120
99,858
46.0%
Net income attributable to noncontrolling interests . . . . .
663
2,514
(1,851)
-73.6%
Net income attributable to Generac Holdings Inc. . . . . .
$ 316,315
$ 214,606
$101,709
47.4%
The following sets forth our reportable segment information for the periods indicated:
Net Sales by Reportable
Segment
Year Ended December 31,
(U.S. Dollars in thousands)
2024
2023
$ Change
% Change
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$3,599,149
$3,276,324
$322,825
9.9%
International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
696,685
746,343
(49,658)
-6.7%
Total net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$4,295,834
$4,022,667
$273,167
6.8%
40
Total Sales by Reportable Segment
Year Ended December 31, 2024
Year Ended December 31, 2023
External
Net Sales
Intersegment
Sales
Total
Sales
External
Net Sales
Intersegment
Sales
Total
Sales
Domestic . . . . . . . . . . . . . .
$3,599,149
$ 35,932
$3,635,081
$3,276,324
$
43,937
$3,320,261
International . . . . . . . . . . . .
696,685
28,700
725,385
746,343
91,552
837,895
Intercompany elimination . . .
—
(64,632)
(64,632)
—
(135,489)
(135,489)
Total net sales . . . . . . . . . . .
$4,295,834
$
—
$4,295,834
$4,022,667
$
—
$4,022,667
Adjusted EBITDA by
Reportable Segment
Year Ended December 31,
2024
2023
$ Change
% Change
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$693,203
$523,337
$169,866
32.5%
International . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
95,898
114,522
(18,624)
-16.3%
Total Adjusted EBITDA . . . . . . . . . . . . . . . . . . . . .
$789,101
$637,859
$151,242
23.7%
The following table sets forth our net sales by product class for the periods indicated:
Net Sales by Product Class
Year Ended December 31,
(U.S. Dollars in thousands)
2024
2023
$ Change
% Change
Residential products . . . . . . . . . . . . . . . . . . . . . . . .
$2,433,474
$2,062,929
$ 370,545
18.0%
Commercial & Industrial products . . . . . . . . . . . . . .
1,389,469
1,494,799
(105,330)
-7.0%
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
472,891
464,939
7,952
1.7%
Total net sales . . . . . . . . . . . . . . . . . . . . . . . . . . .
$4,295,834
$4,022,667
$ 273,167
6.8%
Net sales.
The increase in domestic segment sales for the year ended December 31, 2024, was
primarily driven by an increase in residential product sales, most notably in home standby and portable
generators following the elevated power outage activity in the second half of the year. This was partially offset
by a decline in C&I product sales for telecom, rental, and “beyond standby” applications.
The decrease in international segment sales for the year ended December 31, 2024, was primarily driven
by lower intersegment sales related to softness in the telecom market and a decline in portable generator and
C&I product sales in Europe, partially offset by growth in Latin America.
In addition, total net sales from non-annualized acquisitions for the year ended December 31, 2024,
were $16.5 million, mostly in the domestic segment.
Gross profit.
Gross profit margin for the year ended December 31, 2024, was 38.8% compared to
33.9% for the year ended December 31, 2023. The increase in gross profit margin was primarily driven by
favorable sales mix, including higher home standby generator sales, the realization of lower input costs, and
plant efficiencies.
Operating expenses.
Operating expenses increased $149.7 million, or 15.3%, as compared to the prior
year. The increase in operating expenses was primarily driven by higher employee and marketing costs, and
increased incentive compensation and variable expenses related to higher shipment volumes and profitability.
2024 operating expenses also include $10.5 million of legal provisions and other costs related to patent and
other litigation (see Note 18, “Commitments and Contingencies” to the consolidated financial statements in
Item 8 of this Annual Report on Form 10-K for additional information). 2023 operating expenses included
a $5.8 million provision for a regulatory matter with the CPSC, $28.3 million of legal charges related to patent
and other litigation (see Note 18, “Commitments and Contingencies” for additional information),
$4.4 million of additional customer support costs related to a clean energy product customer that filed for
bankruptcy.
41
Other expense.
The increase in other expense, net in 2024 was driven primarily by a $38.0 million
expense for the change in fair value of our investment in warrants and equity securities of Wallbox N.V.,
and a $4.9 million loss on extinguishment of debt. This was partially offset by a $3.3 million increase in
investment income driven by higher cash on hand and a $7.9 million decrease in interest expense driven by
decreased borrowings and interest rates compared to the prior year comparable period.
Provision for income taxes.
The effective income tax rates for the years ended December 31, 2024 and
2023 were 22.6% and 25.2%, respectively. The decrease in the effective tax rate was primarily due to
unfavorable discrete tax items in 2023 that did not repeat in the current year, as well as favorable 2024 earnings
mix with higher earnings in lower tax jurisdictions.
Net income attributable to Generac Holdings Inc.
Net income attributable to Generac Holdings Inc.
was $316.3 million as compared to $214.6 million in the prior year period. The increase was primarily driven
by higher sales and gross margin, as noted above.
Adjusted EBITDA.
Adjusted EBITDA is defined and reconciled to net income in, “Non-GAAP
Measures — Adjusted EBITDA” included below in Item 7 of this Annual Report on Form 10-K. Adjusted
EBITDA margins for the domestic segment for the year ended December 31, 2024, were 19.1% of domestic
segment total sales compared to 15.8% for the year ended December 31, 2023. This margin improvement
was primarily driven by favorable sales mix and lower input costs, partially offset by higher operating expense
investments to support future growth initiatives.
Adjusted EBITDA margins for the international segment, before deducting for non-controlling
interests, for the year ended December 31, 2024, were 13.2% of international segment total sales compared
to 13.7% in the prior year. This margin decrease was primarily due to reduced operating leverage on lower
shipments during the year.
Adjusted net income.
Adjusted Net Income is defined and reconciled to net income in, “Non-GAAP
Measures — Adjusted Net Income” included below in Item 7 of this Annual Report on Form 10-K. Adjusted
Net Income was $438.5 million for the year ended December 31, 2024, compared to $335.3 million for the
year ended December 31, 2023, with the increase primarily due to higher net income in the current year as
outlined above, together with the impact of various add-backs in the current and prior years.
Liquidity and Financial Position
Our primary cash requirements include payment for raw materials and components, salaries and
benefits, facility and lease costs, operating expenses, interest and principal payments on debt, and capital
expenditures. We finance our operations primarily from cash flow generated from operations and, if necessary,
borrowings under our revolving credit facility.
As of December 31, 2024, there was $498.8 million outstanding under the Tranche B Term Loan
Facility, $712.5 million outstanding under the Tranche A Term Loan Facility, and no borrowings on the
Revolving Facility, leaving $1,249.2 million of unused capacity, net of outstanding letters of credit. The
Tranche B Term Loan Facility bears interest at the adjusted SOFR rate plus an applicable margin of 1.75%,
subject to a SOFR floor of 0.0%. As of December 31, 2024, the interest rate for the Tranche B Term Loan
Facility is 6.34%. The Tranche A Term Loan Facility and the Revolving Facility bear interest at a rate based
on adjusted SOFR plus an applicable margin between 1.25% and 1.75%, based on the Company’s total
leverage ratio and subject to a SOFR floor of 0.0%. As of December 31, 2024, the interest rates for the
Tranche A Term Loan Facility and Revolving Facility are 6.15% and 6.19%, respectively. See Note 5,
“Derivative Instruments and Hedging Activities” to the consolidated financial statements in Item 8 of this
Annual Report on Form 10-K and Item 7A “Quantitative and Qualitative Disclosures About Market Risk”
for further information on interest rate swaps, which help to reduce our borrowing costs.
The Tranche A Term Loan Facility and Revolving Facility mature on June 29, 2027. The Tranche A
Term Loan Facility is repayable in installments maturing at the end of each quarter commencing
September 2023, with a balloon payment due June 2027. The Tranche B Term Loan Facility matures on
July 3, 2031, and is repayable in installments maturing at the end of each quarter commencing September 2024,
with a balloon payment due July 2031.
42
As of December 31, 2024, we had total liquidity of $1,530.5 million, which consists of $281.3 million
of cash and cash equivalents and $1,249.2 million available under our Revolving Facility. We believe we
have a strong liquidity position that allows us to execute our strategic plan and provides flexibility to continue
to invest in future growth opportunities.
In July 2022, our Board approved a stock repurchase program, which commenced on August 5, 2022,
and allowed for the repurchase of up to $500.0 million of our common stock over a 24-month period.
Additionally, on February 12, 2024, our Board approved a new stock repurchase program that allows for
the repurchase of up to $500.0 million of our common stock over the next twenty-four months. The new
program replaced the prior share repurchase program, which had approximately $26.3 million remaining
available for repurchase when the new program was approved. Pursuant to the approved program, we
may repurchase our common stock from time to time, in amounts and at prices we deem appropriate, subject
to market conditions and other considerations. The repurchases may be executed using a combination of
Rule 10b5-1 trading plans, open market purchases, privately negotiated agreements, or other transactions.
The actual timing, number and value of shares repurchased under the program will be determined by
management at its discretion and in compliance with the terms of our credit agreements. The repurchases
may be funded with cash on hand, available borrowings, or proceeds from potential debt or other capital
markets sources. The stock repurchase program may be suspended or discontinued at any time without prior
notice. As of December 31, 2024, the remaining unused buyback authorization was $347,257.
During the years ended December 31, 2024 and 2023, we repurchased 1,046,351 shares of our common
stock for $152.7 million, and 2,188,475 shares for $251.5 million, respectively. We have periodically reissued
shares out of Treasury stock, including for acquisition contingent consideration payments and some
equity grants.
We have an arrangement with a finance company to provide floor plan financing for selected dealers.
This arrangement provides liquidity for our dealers by financing dealer purchases of Generac products with
credit availability from the finance company. We receive payment from the finance company after shipment
of product to the dealer, and our dealers are given a longer period of time to pay the finance company. If our
dealers do not pay the finance company, we may be required to repurchase the applicable inventory held
by the dealer. We do not indemnify the finance company for any credit losses they may incur. Total dealer
purchases financed under this arrangement accounted for approximately 13% and 12% of net sales for
the years ended December 31, 2024 and 2023, respectively. The amount financed by dealers which remained
outstanding was $165.4 million and $158.0 million as of December 31, 2024 and 2023, respectively.
See Note 12, “Credit Agreements,” and Note 13, “Stock Repurchase Program,” to the consolidated
financial statements included in Item 8 of this Annual Report on Form 10-K for more information on our
credit agreements and stock repurchase programs. See Note 10, “Leases,” to the consolidated financial
statements included in Item 8 of this Annual Report on Form 10-K for the maturity schedule of our lease
liabilities.
Long-term Liquidity
We believe our cash and cash equivalents, cash flow from operations, and availability under our
Revolving Facility and other short-term lines of credit will provide us with sufficient capital to continue to
run our operations. We may use a portion of our cash flow for debt repayments and common stock buybacks,
impacting the amount available for working capital, capital expenditures, acquisitions, and other general
corporate purposes. As we continue to expand our business, we may require additional capital to fund other
shareholder value enhancing activities.
43
Cash Flow
Year ended December 31, 2024 compared to year ended December 31, 2023
The following table summarizes our cash flows by source (use) for the periods presented:
Year Ended December 31,
(U.S. Dollars in thousands)
2024
2023
$ Change
% Change
Net cash provided by operating activities . . . . . . . . . . . . .
$ 741,301
$ 521,670
$ 219,631
42.1%
Net cash used in investing activities . . . . . . . . . . . . . . . . .
(208,712)
(178,063)
(30,649)
-17.2%
Net cash used in financing activities . . . . . . . . . . . . . . . .
(448,835)
(277,137)
(171,698)
-62.0%
Effect of foreign exchange rate changes on cash and cash
equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3,471)
1,801
(5,272)
-292.7%
Net increase in cash and cash equivalents
. . . . . . . . . . . .
$
80,283
$
68,271
$
12,012
17.6%
The increase in net cash provided by operating activities was primarily driven by higher operating
earnings coupled with a larger decrease in working capital in the current year period, as compared to the
prior year.
The $208.7 million net cash used in investing activities for the year ended December 31, 2024 primarily
represents cash payments of $136.7 million for the purchase of property and equipment (net of $11.1 million
of capital expenditures in accounts payable as of December 31, 2024), $35.0 million for an incremental
minority investment in Wallbox N.V., $2.8 million for a minority investment in Earth Foundry Fund,
$1.6 million for a tax equity investment, and $34.7 million collectively for the acquisitions of Huntington,
C&I BESS, Ageto, and Wolverine. These were partially offset by $2.0 million of cash proceeds from the sale
of our minority interest in Rolling Energy Resources.
The $178.1 million net cash used in investing activities for the year ended December 31, 2023 primarily
represents cash payments of $129.1 million for the purchase of property and equipment (net of $10.9 million
of capital expenditures in accounts payable as of December 31, 2023), $30.0 million for a minority
investment in Wallbox, $16.0 million for the acquisition of REFU, $6.6 million for a tax equity investment,
and a $2.6 million minority investment in Rolling Energy Resources and Earth Foundry Fund.
The $448.8 million net cash used in financing activities for the year ended December 31, 2024 primarily
represents $849.1 million of debt repayments ($54.5 million of short-term borrowings and $794.6 million of
long-term borrowings and finance lease obligations), $152.7 million of stock repurchases, a $9.1 million
payment for the remaining ownership interest in Captiva, $7.4 million of payments for deferred acquisition
consideration, $24.8 million for taxes paid related to equity awards, and $3.6 million of payments for debt
issuance costs related to our amended Tranche B Term Loan credit agreement refinancing. These uses of cash
were partially offset by proceeds of $29.2 million from short-term borrowings, $541.5 million from long-term
borrowings, and $27.6 million from the exercise of stock options.
The $277.1 million net cash used in financing activities for the year ended December 31, 2023 primarily
consisted of $104.8 million in cash payments used to purchase the remaining ownership interest in Pramac,
$251.5 million used for stock repurchases, $325.8 million of debt repayments ($37.1 million of short-term
borrowings and $288.7 million of long-term borrowings and finance lease obligations), $10.9 million of taxes
paid related to equity awards, and $5.0 million for payment of contingent acquisition consideration. These
uses of cash were partially offset by proceeds of $348.8 million from long-term borrowings, $64.3 million from
short-term borrowings, and $7.8 million proceeds from the exercise of employee stock options.
Senior Secured Credit Facilities
Refer to Note 12, “Credit Agreements,” to the consolidated financial statements in Item 8 of this
Annual Report on Form 10-K for information on our senior secured credit facilities.
Covenant Compliance
Our Term Loans restrict the aggregate amount of dividends and distributions that can be paid and, in
certain circumstances, requires pro forma compliance with certain fixed charge coverage ratios or gross
44
leverage ratios, as applicable, in order to pay certain dividends and distributions. Our Term Loans also
contain other affirmative and negative covenants that, among other things, limit the incurrence of additional
indebtedness, liens on property, sale and leaseback transactions, investments, loans and advances, mergers
or consolidations, asset sales, acquisitions, transactions with affiliates, prepayments of certain other
indebtedness, and modifications of our organizational documents. The Tranche A Term Loan Facility and
the Revolving Facility contain certain financial covenants that require the Company to maintain a total
leverage ratio below 3.75 to 1.00, an interest coverage ratio above 3.00 to 1.00, and may require an excess
cash flow payment. As of December 31, 2024, the Company’s total leverage ratio was 1.33 to 1.00, and the
Company’s interest coverage ratio was 10.03 to 1.00. The Company was not required to make an excess cash
flow payment as of December 31, 2024. The Company was also in compliance with all other covenants of
the Amended Credit Agreement as of December 31, 2024.
Our Term Loans contain customary events of default, including, among others, nonpayment of
principal, interest or other amounts, failure to perform covenants, inaccuracy of representations or
warranties in any material respect, cross-defaults with other material indebtedness, certain undischarged
judgments, the occurrence of certain ERISA, bankruptcy or insolvency events, or the occurrence of a change
in control (as defined in the Amended Credit Agreement). A bankruptcy or insolvency event of default
will cause the obligations under the Term Loans to automatically become immediately due and payable.
The Revolving Facility also contains covenants and events of default substantially similar to those in
the Term Loans, as described above.
Capital Expenditures
Our operations require capital expenditures for facilities and related improvements, technology,
research & development, tooling, equipment, capacity expansion, internal use software, IT systems &
infrastructure, and upgrades. Capital expenditures were $136.7 million, $129.1 million, and $86.2 million in
the years ended December 31, 2024, 2023 and 2022, respectively, and were funded primarily through cash
from operations.
Critical Accounting Policies and Estimates
In preparing the financial statements, management is required to make estimates and assumptions that
have an impact on the asset, liability, revenue and expense amounts reported. These estimates can also affect
our supplemental information disclosures, including information about contingencies, risk and financial
condition. We believe, given current facts and circumstances, that our estimates and assumptions are
reasonable, adhere to U.S. GAAP, and are consistently applied. Inherent in the nature of an estimate or
assumption is the fact that actual results may differ from estimates and estimates may vary as new facts and
circumstances arise. We make routine estimates and judgments in determining net realizable value of
accounts receivable, inventories, property and equipment, prepaid expenses, product warranties and other
reserves. Management believes our most critical accounting estimates and assumptions are in the following
areas: goodwill and other indefinite-lived intangible asset impairment assessment; and income taxes. The
following is a discussion of critical accounting estimates in each of these areas.
Goodwill and Other Indefinite-Lived Intangible Assets
When preparing a discounted cash flow analysis for purposes of our annual impairment test, we make
a number of key estimates and assumptions. We estimate the future cash flows of the business based on
historical and forecasted revenues and operating costs. In addition, we apply a discount rate to the estimated
future cash flows for the purpose of the valuation. This discount rate is based on the estimated weighted
average cost of capital for the business and may change from year to year. Weighted average cost of capital
includes certain assumptions such as market capital structures, market betas, risk-free rate of return and
estimated costs of borrowing.
For all reporting units, a considerable amount of management judgment and assumptions are required
in performing the goodwill and indefinite-lived intangible asset impairment tests. While we believe our
judgments and assumptions are reasonable, different assumptions could change the estimated fair values. A
45
number of factors, many of which we have no ability to control, could cause actual results to differ from the
estimates and assumptions we employed. These factors include:
• a rising interest rate environment;
• a prolonged global or regional economic downturn;
• a significant decrease in the demand for our products;
• the inability to develop new and enhanced products and services in a timely manner;
• a significant adverse change in legal factors, the business climate, or regulatory environment;
• an adverse action or assessment by a regulator;
• successful efforts by our competitors to gain market share in our markets;
• disruptions to the Company’s business;
• inability to effectively integrate acquired businesses;
• loss of key management and employees
• unexpected or unplanned changes in the use of assets or entity structure; and
• business divestitures.
If management’s estimates of future operating results change or if there are changes to other
assumptions due to these factors, the estimate of the fair values may change significantly. Such change
could result in impairment charges in future periods, which could have a significant impact on our operating
results and financial condition. We performed the required annual impairment tests for goodwill and other
indefinite-lived intangible assets for the fiscal years 2024, 2023 and 2022, and found no impairment.
Refer to Note 2, “Summary of Accounting Policies — Goodwill and Other Indefinite-Lived Intangible
Assets,” to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K for further
information on the Company’s policy regarding the accounting for goodwill and other indefinite-lived
intangible assets.
Income Taxes
We account for income taxes in accordance with Accounting Standards Codification (ASC) 740,
Income Taxes. Our estimates of income taxes payable, deferred income taxes and the effective tax rate are
based on an analysis of many factors including interpretations of federal, state and international income tax
laws; the difference between tax and financial reporting bases of assets and liabilities; estimates of amounts
currently due or owed in various jurisdictions; and current accounting standards. We review and update our
estimates on a quarterly basis as facts and circumstances change and actual results are known. In assessing
the net realizable value of the deferred tax assets on our balance sheet, we consider whether it is more likely
than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of
deferred tax assets is dependent on the generation of future taxable income during the years in which those
temporary differences become deductible. We consider the taxable income in prior carryback years,
scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in
making this assessment.
Refer to Note 15, “Income Taxes,” to the consolidated financial statements in Item 8 of this Annual
Report on Form 10-K for further information on the Company’s income taxes and income tax positions.
New Accounting Standards
For information on new accounting pronouncements and the impact of these pronouncements on our
consolidated financial statements, refer to Note 2, “Summary of Accounting Policies — New Accounting
Pronouncements,” to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K.
46
Non-GAAP Measures
Adjusted EBITDA
To supplement our consolidated financial statements presented in accordance with U.S. GAAP, the
Company provides the computation of Adjusted EBITDA attributable to the Company, which is defined as
net income before noncontrolling interests adjusted for the following items: interest expense, depreciation
expense, amortization of intangible assets, income tax expense, certain non-cash gains and losses including
certain purchase accounting adjustments and contingent consideration adjustments, share-based
compensation expense, certain transaction costs and credit facility fees, business optimization expenses,
provision for certain legal and regulatory charges, certain other specific provisions, mark-to-market gains
and losses on a minority investment, and Adjusted EBITDA attributable to noncontrolling interests. The
provision for legal and regulatory charges adjusts for matters that are significant and not part of the ordinary
routine litigation or regulatory matters incidental to the Company’s business, such as large suits and
settlements, class action lawsuits, government inquiries, and certain intellectual property litigation. The
adjustments to net income in computing Adjusted EBITDA are set forth in the reconciliation table below.
The computation of Adjusted EBITDA is based primarily on the definition included in our Amended Credit
Agreement.
We view Adjusted EBITDA as a key measure of our performance. We present Adjusted EBITDA not
only due to its importance for purposes of our credit agreements, but also because it assists us in comparing
our performance across reporting periods on a consistent basis as it excludes certain items that we do not
believe are indicative of our core operating performance. Our management uses Adjusted EBITDA:
• for planning purposes, including the preparation of our annual operating budget and developing and
refining our internal projections for future periods;
• to allocate resources to enhance the financial performance of our business;
• as a target for the determination of the bonus component of compensation for our senior executives
under our management incentive plan, as described further in our Proxy Statement;
• to evaluate the effectiveness of our business strategies and as a supplemental tool in evaluating our
performance against our budget for each period; and
• in communications with our Board and investors concerning our financial performance.
We believe Adjusted EBITDA is used by securities analysts, investors and other interested parties in the
evaluation of the Company. Management believes the disclosure of Adjusted EBITDA offers an additional
financial metric that, when coupled with results prepared in accordance with U.S. generally accepted
accounting principles (U.S. GAAP) and the reconciliation to U.S. GAAP results, provides a more complete
understanding of our results of operations and the factors and trends affecting our business. We believe
Adjusted EBITDA is useful to investors for the following reasons:
• Adjusted EBITDA and similar non-GAAP measures are widely used by investors to measure a
company’s operating performance without regard to items that can vary substantially from company
to company depending upon financing and accounting methods, book values of assets, tax
jurisdictions, capital structures and the methods by which assets were acquired;
• investors can use Adjusted EBITDA as a supplemental measure to evaluate the overall operating
performance of our Company, including our ability to service our debt and other cash needs; and
• by comparing our Adjusted EBITDA in different historical periods, our investors can evaluate our
operating performance excluding the impact of items described below.
The adjustments included in the reconciliation table listed below are presented to illustrate the
operating performance of our business in a manner consistent with the presentation used by our management
and Board. These adjustments eliminate the impact of a number of items that:
• we do not consider indicative of our ongoing operating performance, such as non-cash write-downs
and other charges, non-cash gains, write-offs relating to the retirement of debt, severance costs and
47
other restructuring-related business optimization expenses, provision for certain legal and regulatory
charges, certain other specific provisions, and mark-to-market gains and losses on a minority
investment;
• we believe to be akin to, or associated with, interest expense, such as administrative agent fees,
revolving credit facility commitment fees and letter of credit fees; or
• are non-cash in nature, such as share-based compensation expense.
We explain in more detail in footnotes (a) through (g) below why we believe these adjustments are
useful in calculating Adjusted EBITDA as a measure of our operating performance.
Adjusted EBITDA does not represent, and should not be a substitute for, net income or cash flows
from operations as determined in accordance with U.S. GAAP. Adjusted EBITDA has limitations as an
analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as
reported under U.S. GAAP. Some of the limitations are:
• Adjusted EBITDA does not reflect our cash expenditures, or future requirements for capital
expenditures or contractual commitments;
• Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
• Adjusted EBITDA does not reflect the significant interest expense, or the cash requirements
necessary to service interest or principal payments on our debt;
• although depreciation and amortization are non-cash charges, the assets being depreciated and
amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any
cash requirements for such replacements;
• several of the adjustments that we use in calculating Adjusted EBITDA, such as non-cash write-
downs and other charges, while not involving cash expense, do have a negative impact on the value of
our assets as reflected in our consolidated balance sheet prepared in accordance with U.S. GAAP;
and
• other companies may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a
comparative measure.
Furthermore, as noted above, one of our uses of Adjusted EBITDA is as a target for determining
elements of compensation for our senior executives. At the same time, some or all of these senior executives
have responsibility for monitoring our financial results, generally including the adjustments in calculating
Adjusted EBITDA (subject ultimately to review by our Board in the context of the Board’s review of our
financial statements). While many of the adjustments (for example, transaction costs and credit facility fees),
involve mathematical application of items reflected in our financial statements, others involve a degree of
judgment and discretion. While we believe all of these adjustments are appropriate, and while the calculations
are subject to review by our Board in the context of the Board’s review of our financial statements, and
certification by our Chief Financial Officer in a compliance certificate provided to the lenders under our
Amended Credit Agreement, this discretion may be viewed as an additional limitation on the use of Adjusted
EBITDA as an analytical tool.
Because of these limitations, Adjusted EBITDA should not be considered as a measure of discretionary
cash available to us to invest in the growth of our business. We compensate for these limitations by relying
primarily on our U.S. GAAP results and using Adjusted EBITDA only supplementally.
48
The following table presents a reconciliation of net income to Adjusted EBITDA attributable to
Generac Holdings Inc.:
Year Ended December 31,
(U.S. Dollars in thousands)
2024
2023
2022
Net income attributable to Generac Holdings Inc. . . . . . . . . . . . . . . . .
$316,315
$214,606
$399,502
Net income attributable to noncontrolling interests . . . . . . . . . . . . . . .
663
2,514
9,368
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
316,978
217,120
408,870
Interest expense
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
89,713
97,627
54,826
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
171,768
166,602
156,141
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
92,460
73,180
99,596
Non-cash write-down and other adjustments(a) . . . . . . . . . . . . . . . . . .
4,757
(5,953)
(2,091)
Non-cash share-based compensation expense(b)
. . . . . . . . . . . . . . . . .
49,248
35,492
29,481
Transaction costs and credit facility fees(c) . . . . . . . . . . . . . . . . . . . . .
5,097
4,054
5,026
Business optimization and other charges(d) . . . . . . . . . . . . . . . . . . . . .
4,752
10,551
4,371
Provision for legal, regulatory, and clean energy product charges(e) . . . .
10,931
38,490
65,265
Change in fair value of investment(f) . . . . . . . . . . . . . . . . . . . . . . . . .
38,006
—
—
Loss on extinguishment of debt(g) . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,861
—
3,743
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
530
696
139
Adjusted EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
789,101
637,859
825,367
Adjusted EBITDA attributable to noncontrolling interests . . . . . . . . . .
1,175
4,687
15,087
Adjusted EBITDA attributable to Generac Holdings Inc.
. . . . . . . . . .
$787,926
$633,172
$810,280
(a)
Represents the following non-cash charges, gains, and other adjustments: (gains)/losses on the
disposition of assets other than in the ordinary course of business, (gains)/losses on sales of certain
investments, unrealized mark-to-market adjustments on commodity contracts, certain foreign currency
related adjustments, and certain purchase accounting and contingent consideration adjustments. We
believe that adjusting net income for these items is useful for the following reasons:
• The gains/losses on disposition of assets other than in the ordinary course of business and sales of
certain investments result from the sale of assets that are no longer useful in our business and therefore
represent gains or losses that are not from our core operations;
• The adjustments for unrealized mark-to-market gains and losses on commodity contracts represent
non-cash items to reflect changes in the fair value of forward contracts that have not been settled or
terminated. We believe it is useful to adjust net income for these items because the charges do not
represent a cash outlay in the period in which the charge is incurred, although Adjusted EBITDA must
always be used together with our U.S. GAAP statements of comprehensive income and cash flows
to capture the full effect of these contracts on our operating performance;
• The purchase accounting adjustments represent non-cash items to reflect fair value of certain assets
at the date of acquisition, and therefore do not reflect our ongoing operations. Fair value adjustments
to contingent consideration obligations related to business acquisitions are added back as they are
akin to purchase price.
(b) Represents share-based compensation expense to account for stock options, restricted stock, and other
stock awards over their respective vesting period.
(c)
Represents transaction costs incurred directly in connection with any investment, as defined in our
credit agreement, equity issuance or debt issuance or refinancing, together with certain fees relating to
our senior secured credit facilities, such as administrative agent fees and credit facility commitment fees
under our Amended Credit Agreement.
49
(d) Represents severance and other restructuring charges related to the consolidation of certain operating
facilities and organizational functions.
(e)
Represents the following litigation, regulatory, and other matters that are not indicative of our ongoing
operations:
• A provision for judgments, settlements, and legal expenses related to certain patent lawsuits —
$9.2 million in 2024; $27.3 million in 2023.
• Legal expenses related to certain class action lawsuits — $1.3 million in 2024; $1.0 million in 2023.
• A bad debt provision and additional customer support costs related to a clean energy product
customer that filed for bankruptcy in 2022 — $0.4 million additional customer support costs in
2024; $4.4 million additional customer support costs in 2023; $17.9 million bad debt provision in
2022.
• A provision for a matter with the CPSC concerning the imposition of civil fines for allegedly failing
to timely submit a report under the Consumer Product Safety Act (CPSA) in relation to certain
portable generators that were subject to a voluntary recall previously announced on July 29, 2021 —
$5.8 million in 2023; $10.0 million in 2022.
• A warranty provision to address certain clean energy product warranty-related matters — $37.3 million
in 2022.
(f)
Represents non-cash losses from changes in the fair value of the Company’s investment in Wallbox N.V.
warrants and equity securities.
(g)
Represents fees paid to creditors and the write-off of the unamortized original issue discount and
deferred financing costs in connection with the 2024 and 2022 credit agreement refinancings. Refer to
Note 12, “Credit Agreements,” to the consolidated financial statements in Item 8 of this Annual Report
on Form 10-K for further information on the losses on extinguishment of debt.
Adjusted Net Income
To further supplement our consolidated financial statements in accordance with U.S. GAAP, we
provide the computation of Adjusted Net Income attributable to the Company, which is defined as net
income before noncontrolling interests adjusted for the following items: amortization of intangible assets,
amortization of deferred financing costs and original issue discount related to the Company’s debt, intangible
impairment charges, certain transaction costs and other purchase accounting adjustments, business
optimization expenses, provision for certain legal and regulatory charges, certain other specific provisions,
mark-to-market gains and losses on a minority investment, other non-cash gains and losses, and adjusted net
income attributable to non-controlling interests, as set forth in the reconciliation table below.
We believe Adjusted Net Income is used by securities analysts, investors and other interested parties in
the evaluation of our company’s operations. Management believes the disclosure of Adjusted Net Income
offers an additional financial metric that, when used in conjunction with U.S. GAAP results and the
reconciliation to U.S. GAAP results, provides a more complete understanding of our ongoing results of
operations, and the factors and trends affecting our business.
The adjustments included in the reconciliation table listed below are presented to illustrate the
operating performance of our business in a manner consistent with the presentation used by investors and
securities analysts. Similar to the Adjusted EBITDA reconciliation, these adjustments eliminate the impact of
a number of items we do not consider indicative of our ongoing operating performance or cash flows,
such as amortization costs, transaction costs and write-offs relating to the retirement of debt.
Similar to Adjusted EBITDA, Adjusted Net Income does not represent, and should not be a substitute
for, net income or cash flows from operations as determined in accordance with U.S. GAAP. Adjusted Net
Income has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for
analysis of our results as reported under U.S. GAAP. Some of the limitations are:
• Adjusted Net Income does not reflect changes in, or cash requirements for, our working capital
needs;
50
• although amortization is a non-cash charge, the assets being amortized may have to be replaced in
the future, and Adjusted Net Income does not reflect any cash requirements for such replacements;
and
• other companies may calculate Adjusted Net Income differently than we do, limiting its usefulness as
a comparative measure.
The following table presents a reconciliation of net income to Adjusted Net Income attributable to
Generac Holdings Inc.:
Year Ended December 31,
(U.S. Dollars in thousands)
2024
2023
2022
Net income attributable to Generac Holdings Inc. . . . . . . . . . . . . . . . .
$316,315
$214,606
$399,502
Net income attributable to noncontrolling interests . . . . . . . . . . . . . . .
663
2,514
9,368
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
316,978
217,120
408,870
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . .
97,743
104,194
103,320
Amortization of deferred financing costs and original issue discount . . .
3,242
3,885
3,234
Transaction costs and other purchase accounting adjustments(a) . . . . . .
2,717
2,089
3,588
Loss/(gain) attributable to business or asset dispositions(b) . . . . . . . . . .
65
(119)
(229)
Business optimization and other charges(c) . . . . . . . . . . . . . . . . . . . . .
4,752
10,551
4,371
Provision for legal, regulatory, and clean energy product charges(c) . . . .
10,931
38,490
65,265
Change in fair value of investment(c) . . . . . . . . . . . . . . . . . . . . . . . . .
38,006
—
—
Loss on extinguishment of debt(c) . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,861
—
3,743
Tax effect of add backs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(40,173)
(38,384)
(43,638)
Adjusted net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
439,122
337,826
548,524
Adjusted net income attributable to noncontrolling interests . . . . . . . . .
663
2,514
9,675
Adjusted net income attributable to Generac Holdings Inc. . . . . . . . . .
$438,459
$335,312
$538,849
(a)
Represents transaction costs incurred directly in connection with any investment, as defined in our
credit agreement, equity issuance or debt issuance or refinancing, and certain purchase accounting and
contingent consideration adjustments.
(b) Represents losses/(gains) attributable to the disposition of a business or assets occurring in other than
ordinary course, as defined in our credit agreement.
(c)
See reconciliation of net income to Adjusted EBITDA attributable to Generac Holdings Inc. above.
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risk from changes in foreign currency exchange rates, commodity prices and
interest rates. To reduce the risk from these changes, we use financial instruments from time to time. We do
not hold or issue financial instruments for trading purposes.
Foreign Currency
We are exposed to foreign currency exchange risk as a result of transactions denominated in currencies
other than the U.S. Dollar, as well as operating businesses and supply chains in foreign countries. Periodically,
we utilize foreign currency forward purchase and sales contracts to manage the volatility associated with
certain foreign currency purchases and sales in the normal course of business. Contracts typically have
maturities of twelve months or less. Realized gains and losses on transactions denominated in foreign currency
are recorded as a component of cost of goods sold in the statements of comprehensive income.
The following is a summary of the 41 foreign currency forward contracts outstanding as of December 31,
2024 (notional amounts in thousands of U.S. dollars).
51
Currency Denomination
Trade Dates
Effective Dates
Notional Amount
Expiration Dates
USD . . . . . . . . . . . . . . .
11/4/24
11/4/24
$ 6,000
10/1/25 – 11/3/25
AUD . . . . . . . . . . . . . . .
11/14/24 – 12/18/24
11/14/24 – 12/18/24
$13,250
1/15/25 – 2/5/25
GBP . . . . . . . . . . . . . . .
11/14/24
11/14/24
$ 1,750
1/15/25
Commodity Prices
We are a purchaser of commodities and components manufactured from commodities including steel,
aluminum, copper and others. As a result, we are exposed to fluctuating market prices for those commodities.
While such materials are typically available from numerous suppliers, commodity raw materials are subject
to price fluctuations. We generally buy these commodities and components based on market prices that are
established with the supplier as part of the purchase process. Depending on the supplier, these market
prices may reset on a periodic basis based on negotiated lags and calculations. To the extent that commodity
prices increase and we do not have firm pricing from our suppliers, or our suppliers are not able to honor
such prices, we may experience a decline in our gross margins to the extent we are not able to increase selling
prices of our products or obtain manufacturing efficiencies or supply chain savings to offset increases in
commodity costs.
Periodically, we engage in certain commodity risk management activities to mitigate the impact of
potential price fluctuations on our financial results. These derivatives typically have maturities of less than
eighteen months. As of December 31, 2024, we had the following commodity forward contracts outstanding
(notional amounts in thousands of U.S. dollars):
Hedged Item
Contract Date
Effective Date
Notional Amount
Expiration Date
High Grade Copper
July 22, 2024
August 1, 2024
$947
January 31, 2025
High Grade Copper
July 30, 2024
August 1, 2024
$923
January 31, 2025
Interest Rates
As of December 31, 2024, all of the outstanding debt under our Term Loans and Revolving Facility
was subject to floating interest rate risk. As of December 31, 2024, we had the following interest rate swap
contracts outstanding to help minimize our borrowing costs (notional amount in thousands of U.S. dollars):
Hedged Item
Contract Date
Effective Date
Notional Amount
Fixed SOFR Rate
Expiration Date
SOFR Interest Rate
March 4, 2020
May 31, 2023
$200,000
1.1360%
December 14, 2026
SOFR Interest Rate
March 5, 2020
May 31, 2023
$100,000
1.0700%
December 14, 2026
SOFR Interest Rate
March 6, 2020
May 31, 2023
$200,000
0.9560%
December 14, 2026
In June 2022, in conjunction with the amendments to the Company’s credit agreements discussed
further in Note 12, “Credit Agreements,” to our consolidated financial statements in Item 8 of this Annual
Report on Form 10-K, the Company amended its interest rate swaps to match that of the underlying debt and
reconfirmed hedge effectiveness. The Company formally documented all relationships between interest rate
hedging instruments and the related hedged items, as well as its risk-management objectives and strategies for
undertaking various hedge transactions. These interest rate swap agreements qualify as cash flow hedges
and therefore, the effective portions of their gains or losses are reported as a component of accumulated other
comprehensive loss (AOCL) in the consolidated balance sheets. As of December 31, 2024, the fair value of
these interest rate swaps was an asset of $29.3 million, excluding the impact of credit risk. Even after giving
effect to these swaps, we are exposed to risks due to changes in interest rates with respect to the portions
of our Term Loans and Revolving Facility that are not covered by the swaps. A hypothetical change in the
SOFR interest rate of 100 basis points would have changed annual interest expense by approximately
$8.5 million (or, without the swaps in place, approximately $13.5 million) in 2024.
For additional information on the Company’s foreign currency and commodity forward contracts and
interest rate swaps, including amounts charged to the statements of comprehensive income during 2024,
2023, and 2022, refer to Note 5, “Derivative Instruments and Hedging Activities,” and Note 6, “Accumulated
Other Comprehensive Loss,” to our consolidated financial statements in Item 8 of this Annual Report on
Form 10-K.
52
Item 8.
Financial Statements and Supplementary Data
Report of Independent Registered Public Accounting Firm
To the stockholders and the Board of Directors of Generac Holdings Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Generac Holdings Inc. and
subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of
comprehensive income, stockholders’ equity, and cash flows, for each of the three years in the period ended
December 31, 2024, and the related notes (collectively referred to as the “financial statements”). In our
opinion, the financial statements present fairly, in all material respects, the financial position of the Company
as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 2024, in conformity with accounting principles generally
accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight
Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31,
2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 19,
2025, expressed an unqualified opinion on the Company’s internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is
to express an opinion on the Company’s financial statements based on our audits. We are a public accounting
firm registered with the PCAOB and are required to be independent with respect to the Company in
accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities
and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement, whether due to error or fraud. Our audits included performing procedures
to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and
performing procedures that respond to those risks. Such procedures included examining, on a test basis,
evidence regarding the amounts and disclosures in the financial statements. Our audits also included
evaluating the accounting principles used and significant estimates made by management, as well as
evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable
basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the
financial statements that was communicated or required to be communicated to the audit committee and
that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our
especially challenging, subjective, or complex judgments. The communication of critical audit matters does
not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by
communicating the critical audit matter below, providing a separate opinion on the critical audit matter or
on the accounts or disclosures to which it relates.
Revenue — Refer to Note 2 to the Consolidated Financial Statements
Critical Audit Matter Description
The Company has a wide range of products and services that are offered in various markets throughout
the world. The Company’s business activities are carried out by numerous individual business units, which
offer a unique set of products and services within specific geographic areas.
53
We identified revenue as a critical audit matter given the disaggregated nature of the Company’s
operations and business units generating revenue. This required extensive audit effort due to the volume of
the underlying transactions and distinctiveness of each individual business unit. High levels of auditor
judgment were necessary to determine the nature, timing, and extent of audit procedures.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the Company’s revenue transactions included the following, among
others:
• Evaluated the design and effectiveness of the controls within the relevant revenue business processes,
including controls over revenue recognition and operating results.
• For a sample of revenue transactions, we performed detail transaction testing by agreeing the
amounts recorded to source documents and determined that revenue was recognized appropriately.
• For the revenue populations subject to detail transaction testing, we tested the completeness of
revenue by making selections from reciprocal populations and determined whether the transaction
was recorded as a sale in the general ledger.
• For revenue transactions not subject to detail transaction testing we evaluated recorded activity
based on analytical procedures using regression analyses to develop an expectation of the revenue
balance at the product class level.
/s/ Deloitte & Touche LLP
Milwaukee, Wisconsin
February 19, 2025
We have served as the Company’s auditor since 2016.
54
Report of Independent Registered Public Accounting Firm
To the stockholders and the Board of Directors of Generac Holdings Inc.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Generac Holdings Inc. and subsidiaries
(the “Company”) as of December 31, 2024, based on criteria established in Internal Control — Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO). In our opinion, the Company maintained, in all material respects, effective internal control over
financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated
Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight
Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended
December 31, 2024, of the Company and our report dated February 19, 2025, expressed an unqualified
opinion on those financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial
reporting and for its assessment of the effectiveness of internal control over financial reporting, included in
the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility
is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are
a public accounting firm registered with the PCAOB and are required to be independent with respect to
the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether effective internal control over
financial reporting was maintained in all material respects. Our audit included obtaining an understanding of
internal control over financial reporting, assessing the risk that a material weakness exists, testing and
evaluating the design and operating effectiveness of internal control based on the assessed risk, and
performing such other procedures as we considered necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles. A company’s internal control
over financial reporting includes those policies and procedures that (1) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets
of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that
receipts and expenditures of the company are being made only in accordance with authorizations of
management and directors of the company; and (3) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a
material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or that the degree of compliance with
the policies or procedures may deteriorate.
/s/ Deloitte & Touche LLP
Milwaukee, Wisconsin
February 19, 2025
55
Generac Holdings Inc.
Consolidated Balance Sheets
(U.S. Dollars in Thousands, Except Share and Per Share Data)
December 31,
2024
2023
Assets
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
281,277
$
200,994
Accounts receivable, less allowance for credit losses of $35,465 and $33,925 as
of December 31, 2024 and 2023, respectively . . . . . . . . . . . . . . . . . . . . . .
612,107
537,316
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,031,647
1,167,484
Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
107,139
91,898
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,032,170
1,997,692
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
690,023
598,577
Customer lists, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
152,737
184,513
Patents and technology, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
379,095
417,441
Other intangible assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20,026
27,127
Tradenames, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
206,664
216,995
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,436,261
1,432,384
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24,132
15,532
Operating lease and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
168,223
203,051
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 5,109,331
$ 5,093,312
Liabilities and stockholders’ equity
Current liabilities:
Short-term borrowings
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
55,848
$
81,769
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
458,693
340,719
Accrued wages and employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . .
81,485
54,970
Accrued product warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
56,127
65,298
Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
313,401
292,120
Current portion of long-term borrowings and finance lease obligations . . . . .
67,598
45,895
Total current liabilities
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,033,152
880,771
Long-term borrowings and finance lease obligations . . . . . . . . . . . . . . . . . . . .
1,210,776
1,447,553
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
33,185
90,012
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
193,260
167,008
Operating lease and other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . .
141,515
158,349
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,611,888
2,743,693
Redeemable noncontrolling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
6,549
Stockholders’ equity:
Common stock, par value $0.01, 500,000,000 shares authorized, 73,785,631
and 73,195,055 shares issued as of December 31, 2024 and 2023,
respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
738
733
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,133,756
1,070,386
Treasury stock, at cost, 14,173,697 and 13,057,298 shares as of December 31,
2024 and 2023, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,196,997)
(1,032,921)
Excess purchase price over predecessor basis
. . . . . . . . . . . . . . . . . . . . . . .
(202,116)
(202,116)
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,844,296
2,519,313
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . .
(85,399)
(15,143)
Stockholders’ equity attributable to Generac Holdings Inc. . . . . . . . . . . . . . . .
2,494,278
2,340,252
Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,165
2,818
Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,497,443
2,343,070
Total liabilities and stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 5,109,331
$ 5,093,312
See notes to consolidated financial statements.
56
Generac Holdings Inc.
Consolidated Statements of Comprehensive Income
(U.S. Dollars in Thousands, Except Share and Per Share Data)
Year Ended December 31,
2024
2023
2022
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,295,834 $ 4,022,667 $ 4,564,737
Costs of goods sold
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,630,208
2,657,236
3,042,733
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,665,626
1,365,431
1,522,004
Operating expenses:
Selling and service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
526,446
448,199
496,260
Research and development . . . . . . . . . . . . . . . . . . . . . . . . . .
219,600
173,443
159,774
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . .
285,095
253,396
196,320
Amortization of intangibles . . . . . . . . . . . . . . . . . . . . . . . . .
97,743
104,194
103,320
Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,128,884
979,232
955,674
Income from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
536,742
386,199
566,330
Other (expense) income:
Interest expense
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(89,713)
(97,627)
(54,826)
Investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,605
4,272
1,129
Change in fair value of investment
. . . . . . . . . . . . . . . . . . . .
(38,006)
—
—
Loss on extinguishment of debt . . . . . . . . . . . . . . . . . . . . . .
(4,861)
—
(3,743)
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2,329)
(2,544)
(424)
Total other expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(127,304)
(95,899)
(57,864)
Income before provision for income taxes . . . . . . . . . . . . . . . . .
409,438
290,300
508,466
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . .
92,460
73,180
99,596
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
316,978
217,120
408,870
Net income attributable to noncontrolling interests . . . . . . . . . . .
663
2,514
9,368
Net income attributable to Generac Holdings Inc. . . . . . . . . . . . $
316,315 $
214,606 $
399,502
Other comprehensive income (loss):
Foreign currency translation adjustment . . . . . . . . . . . . . . . . $
(62,842) $
57,963 $
(48,841)
Net unrealized (loss) gain on derivatives . . . . . . . . . . . . . . . . .
(7,672)
(8,004)
38,494
Other comprehensive income (loss) . . . . . . . . . . . . . . . . . . . .
(70,514)
49,959
(10,347)
Total comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . .
246,464
267,079
398,523
Comprehensive income attributable to noncontrolling interests . .
405
2,581
11,179
Comprehensive income attributable to Generac Holdings Inc. . . . $
246,059 $
264,498 $
387,344
Net income attributable to Generac Holdings Inc. per common
share – basic: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
5.46 $
3.31 $
5.55
Weighted average common shares outstanding – basic: . . . . . . . .
59,559,797
61,265,060
63,117,007
Net income attributable to Generac Holdings Inc. per common
share – diluted: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
5.39 $
3.27 $
5.42
Weighted average common shares outstanding – diluted: . . . . . . .
60,350,412
62,058,387
64,681,357
See notes to consolidated financial statements.
57
Generac Holdings Inc.
Consolidated Statements of Stockholders’ Equity
(U.S. Dollars in Thousands, Except Share Data)
Generac Holdings Inc.
Common Stock
Additional
Paid-In
Capital
Treasury Stock
Excess
Purchase
Price
Over
Predecessor
Basis
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Total
Stockholders’
Equity
Noncontrolling
Interest
Total
Shares
Amount
Shares
Amount
Balance as of December 31,
2021 . . . . . . . . . . . . . . . . . . . .
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 $(12,858) . .
38,494
38,494
38,494
Foreign currency translation
adjustment . . . . . . . . . . . . . .
(48,841)
(48,841)
(264)
(49,105)
Common stock issued under equity
incentive plans, net of shares
withheld for employee taxes and
strike price . . . . . . . . . . . . . .
315,240
3
(247)
(244)
(244)
Payment of acquisition contingent
consideration . . . . . . . . . . . . .
33,965
196,531
13,158
47,123
47,123
Net share settlement of restricted
stock awards . . . . . . . . . . . . .
(91,843)
(26,833)
(26,833)
(26,833)
Stock repurchases . . . . . . . . . . .
(2,722,007)
(345,840)
(345,840)
(345,840)
Share-based compensation . . . . . .
29,481
29,481
29,481
Redemption value adjustment . . . .
(49,235)
(49,235)
(49,235)
Net income
. . . . . . . . . . . . . . .
399,502
399,502
1,825
401,327
Balance as of December 31, 2022
. . .
72,701,257
$728
$1,016,138 (11,284,350) $ (808,491) $(202,116) $2,316,224
$(65,102)
$2,257,381
$1,874
$2,259,255
Unrealized loss on interest rate
swaps, net of tax of
$2,674 . . . . . . . . . . . . . . . . .
(8,004)
(8,004)
(8,004)
Foreign currency translation
adjustment . . . . . . . . . . . . . .
57,963
57,963
128
58,091
Common stock issued under equity
incentive plans, net of shares
withheld for employee taxes and
strike price . . . . . . . . . . . . . .
482,855
5
3,345
3,350
3,350
See notes to consolidated financial statements.
58
Generac Holdings Inc.
Common Stock
Additional
Paid-In
Capital
Treasury Stock
Excess
Purchase
Price
Over
Predecessor
Basis
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Total
Stockholders’
Equity
Noncontrolling
Interest
Total
Shares
Amount
Shares
Amount
Payment of acquisition contingent
consideration . . . . . . . . . . . . .
10,943
—
15,411
466,118
33,396
48,807
48,807
Net share settlement of restricted
stock awards . . . . . . . . . . . . .
(50,591)
(6,313)
(6,313)
(6,313)
Stock repurchases . . . . . . . . . . .
(2,188,475)
(251,513)
(251,513)
(251,513)
Share-based compensation . . . . . .
35,492
35,492
35,492
Redemption value
adjustment . . . . . . . . . . . . . .
(11,517)
(11,517)
(11,517)
Net income
. . . . . . . . . . . . . . .
214,606
214,606
816
215,422
Balance as of December 31, 2023
. . .
73,195,055
$733
$1,070,386 (13,057,298) $(1,032,921) $(202,116) $2,519,313
$(15,143)
$2,340,252
$2,818
$2,343,070
Unrealized loss on interest rate
swaps, net of tax of
$2,563 . . . . . . . . . . . . . . . . .
(7,672)
(7,672)
(7,672)
Foreign currency translation
adjustment . . . . . . . . . . . . . .
(62,584)
(62,584)
(258)
(62,842)
Common stock issued under equity
incentive plans, net of shares
withheld for employee taxes and
strike price . . . . . . . . . . . . . .
590,576
5
14,122
8,417
—
14,127
14,127
Net share settlement of restricted
stock awards . . . . . . . . . . . . .
(78,465)
(11,333)
(11,333)
(11,333)
Stock repurchases . . . . . . . . . . .
(1,046,351)
(152,743)
(152,743)
(152,743)
Share-based compensation . . . . . .
49,248
49,248
49,248
Redemption value
adjustment . . . . . . . . . . . . . .
8,941
8,941
8,941
Cash dividends paid to
noncontrolling interest of
subsidiary . . . . . . . . . . . . . . .
(273)
(273)
(273)
Net income
. . . . . . . . . . . . . . .
316,315
316,315
605
316,920
Balance as of December 31, 2024
. . .
73,785,631
$738
$1,133,756 (14,173,697) $(1,196,997) $(202,116) $2,844,296
$(85,399)
$2,494,278
$3,165
$2,497,443
See notes to consolidated financial statements.
59
Generac Holdings Inc.
Consolidated Statements of Cash Flows
(U.S. Dollars in Thousands)
Year Ended December 31,
2024
2023
2022
Operating activities
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 316,978 $ 217,120 $ 408,870
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and finance lease amortization . . . . . . . . . . . . . . . . . . . . . . .
74,025
62,408
52,821
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
97,743
104,194
103,320
Amortization of deferred financing costs and original issue discount . . . . . . .
3,242
3,885
3,234
Change in fair value of investment
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
38,006
—
—
Loss on extinguishment of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,861
—
3,743
Deferred income taxes
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(60,615)
(34,478)
(95,465)
Share-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
49,248
35,492
29,481
Loss (gain) on disposal of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
138
(285)
(592)
Other noncash charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,780
5,922
18,339
Excess tax benefits from equity awards . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5,069)
(977)
(16,910)
Net changes in operating assets and liabilities, net of acquisitions:
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(82,816)
(18,272)
6,547
Inventories
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
122,952
262,670
(319,274)
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
546
24,266
4,766
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
123,571
(120,900)
(223,031)
Accrued wages and employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . .
26,870
7,962
(27,369)
Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25,841
(27,337)
110,036
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . .
741,301
521,670
58,516
Investing activities
Proceeds from sale of property and equipment
. . . . . . . . . . . . . . . . . . . . .
211
2,896
2,077
Proceeds from beneficial interest in securitization transactions . . . . . . . . . . .
—
3,294
3,566
Contribution to tax equity investment . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,629)
(6,627)
(14,930)
Purchase of long-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(37,821)
(32,592)
(15,000)
Proceeds from sale of long-term investments . . . . . . . . . . . . . . . . . . . . . . .
2,000
—
1,308
Expenditures for property and equipment . . . . . . . . . . . . . . . . . . . . . . . . .
(136,733) (129,060)
(86,188)
Acquisition of businesses, net of cash acquired . . . . . . . . . . . . . . . . . . . . .
(34,740)
(15,974)
(25,065)
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(208,712) (178,063)
(134,232)
Financing activities
Proceeds from short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . .
29,219
64,257
248,209
Proceeds from long-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . .
541,475
348,827
1,026,284
Repayments of short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . .
(54,548)
(37,104)
(268,133)
Repayments of long-term borrowings and finance lease obligations . . . . . . . .
(794,600) (288,699)
(542,191)
Stock repurchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(152,743) (251,513)
(345,840)
Payment of debt issuance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3,616)
—
(10,330)
Payment of contingent acquisition consideration . . . . . . . . . . . . . . . . . . . .
—
(4,979)
(16,135)
Payment of deferred acquisition consideration
. . . . . . . . . . . . . . . . . . . . .
(7,421)
—
—
Purchase of additional ownership interest . . . . . . . . . . . . . . . . . . . . . . . . .
(9,117) (104,844)
(375)
Cash dividends paid to noncontrolling interest of subsidiary . . . . . . . . . . . .
(273)
—
(309)
Taxes paid related to equity awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(24,769)
(10,897)
(40,923)
Proceeds from the exercise of stock options
. . . . . . . . . . . . . . . . . . . . . . .
27,558
7,815
13,786
Net cash (used in) provided by financing activities . . . . . . . . . . . . . . . . . . .
(448,835) (277,137)
64,043
Effect of foreign exchange rate changes on cash and cash equivalents . . . . . . .
(3,471)
1,801
(2,943)
Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . .
80,283
68,271
(14,616)
Cash and cash equivalents at beginning of period . . . . . . . . . . . . . . . . . . . .
200,994
132,723
147,339
Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . . . . . . . . . $ 281,277 $ 200,994 $ 132,723
Supplemental disclosure of cash flow information
Cash paid during the period
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
89,420 $
84,027 $
48,912
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
148,828
100,082
150,893
See notes to consolidated financial statements.
60
Generac Holdings Inc.
Notes to Consolidated Financial Statements
Years Ended December 31, 2024, 2023 and 2022
(U.S. Dollars in Thousands, Except Share and Per Share Data)
1.
Description of Business
Founded in 1959, Generac Holdings Inc. (the Company) is a leading global designer and manufacturer
of a wide range of energy technology solutions. The Company provides power generation equipment, energy
storage systems, energy management devices & solutions, and other power products and services serving
the residential, light commercial, and industrial markets. Generac’s power products and solutions are available
globally through a broad network of independent dealers, distributors, retailers, e-commerce partners,
wholesalers, and equipment rental companies, as well as sold direct to certain end user customers.
Over the years, the Company has executed a number of acquisitions that support its strategic plan (refer
to Item 1 in this Annual Report on Form 10-K for discussion of the Company’s “Powering a Smarter World”
strategic plan). A summary of acquisitions affecting the reporting periods presented include:
• In November 2024, the Company acquired Wolverine Power Systems (Wolverine), headquartered in
Zeeland, Michigan. Wolverine is an industrial and residential generator distributor as well as a provider
of maintenance and repair services.
• In August 2024, the Company acquired the assets and liabilities of Ageto, LLC (Ageto). Ageto
designs and integrates microgrid control solutions and is headquartered in Fort Collins, Colorado.
• In June 2024, the Company closed on the acquisition of the Commercial & Industrial Battery
Energy Storage System (C&I BESS) product offering from SunGrid Solutions Inc. located in
Cambridge, Canada.
• In April 2024, the Company acquired Huntington Power Equipment, Inc. (Huntington),
headquartered in Shelton, Connecticut. Huntington is an industrial and residential generator
distributor as well as a provider of maintenance and repair services.
• In February 2023, the Company acquired REFUstor, headquartered in Pfullingen, Germany.
REFUstor is a developer and supplier of battery storage hardware products, advanced software, and
platform services for the commercial and industrial energy storage market.
• In October 2022, the Company acquired Blue Pillar, an industrial IoT platform developer that
designs, deploys, and manages industrial IoT network solutions to enable distributed energy generation
monitoring and control.
• In June 2022, the Company acquired Electronic Environments Co. LLC and related subsidiaries
(collectively EEC). Headquartered in Marlborough, Massachusetts, EEC is an industrial generator
distributor as well as a provider of design, build, maintenance, and repair services for data center and
telecom facilities.
2.
Summary of Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its subsidiaries that
are consolidated in conformity with U.S. GAAP. All intercompany amounts and transactions have been
eliminated in consolidation.
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with an original maturity of
three months or less to be cash equivalents.
61
Concentration of Credit Risk
The Company maintains the majority of its domestic cash in a few commercial banks in multiple
operating and investment accounts. Balances on deposit are insured by the Federal Deposit Insurance
Corporation (FDIC) up to specified limits. Balances in excess of FDIC limits are uninsured. One customer
accounted for approximately 10% and 7% of accounts receivable as of December 31, 2024 and 2023,
respectively. No one customer accounted for greater than 5%, 4%, and 4%, of net sales during the years
ended December 31, 2024, 2023, and 2022, respectively.
Accounts Receivable and Allowance for Credit Losses
The Company’s trade and other receivables primarily arise from the sale of its products and services to
independent residential dealers, industrial distributors and dealers, national and regional retailers, electrical/
HVAC/solar wholesalers, e-commerce partners, equipment rental companies, equipment distributors, EPC
companies, telecommunications customers, and certain end users with payment terms generally ranging from
30 to 90 days. The Company evaluates the credit risk of a customer when extending credit based on a
combination of various financial and qualitative factors that may affect the customers’ ability to pay. These
factors include the customer’s financial condition, past payment experience, credit bureau information,
and regional considerations.
Receivables are recorded at their face value amount less an allowance for credit losses. The Company
maintains an allowance for credit losses, which represents an estimate of expected losses over the remaining
contractual life of its receivables considering current market conditions and estimates for supportable
forecasts when appropriate. The Company measures expected credit losses on its trade receivables on an entity-
by-entity basis. The estimate of expected credit losses considers a historical loss experience rate that is
adjusted for delinquency trends, collection experience, and/or economic risk where appropriate based on
current market conditions. Additionally, management develops a specific allowance for trade receivables
known to have a high risk of expected future credit loss.
The Company holds various credit insurance plans that cover the risk of loss up to specified amounts
on certain trade receivables. As of December 31, 2024, the Company had gross receivables of $647,572 and
an allowance for credit losses of $35,465.
Inventories
Inventories are stated at the lower of cost or market, with cost determined using the first-in, first-out
method.
Property and Equipment
Property and equipment, including internal use software, is recorded at cost and depreciated using the
straight-line method over the estimated useful lives of the assets, which are summarized below (in years).
Costs of leasehold improvements are amortized over the lesser of the term of the lease (including renewal
option periods) or the estimated useful lives of the improvements. The Company capitalizes internal use
software and significant enhancements when the Company obtains a software license or develops the software
internally. The Company capitalizes cloud computing arrangements that qualify as service contracts if the
Company has the contractual right to take possession of the software at any time during the contract period,
without significant penalty and if it is feasible for the Company to either operate the software internally or
contract with a third party to host the software on our behalf. Implementation costs incurred in cloud
computing arrangements that are service contracts are recorded in prepaid expenses and other assets and
62
operating lease and other assets in the Consolidated Balance Sheets and are amortized over the expected
service period of the cloud computing arrangements. Finance lease right of use assets are included in property
and equipment.
Land improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8 – 20
Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10 – 40
Machinery and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3 – 15
Dies and tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3 – 10
Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3 – 6
Office & information technology equipment and internal use software . . . . . . . . . . . . .
3 – 15
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2 – 20
Total depreciation and finance lease amortization expense was $74,025, $62,408, and $52,821 for
the years ended December 31, 2024, 2023 and 2022, respectively.
Goodwill and Other Indefinite-Lived Intangible Assets
Goodwill represents the excess of the purchase price over fair value of identifiable net assets acquired
from business acquisitions. Goodwill is not amortized, but is reviewed for impairment on an annual basis
and between annual tests if indicators of impairment are present. The Company evaluates goodwill for
impairment annually as of October 31 or more frequently when an event occurs or circumstances change that
indicates the carrying value may not be recoverable. The Company has the option to assess goodwill for
impairment by performing either a qualitative assessment or quantitative test. The qualitative assessment
determines whether it is more likely than not that the fair value of a reporting unit is less than its carrying
amount. If the Company determines that it is not more likely than not that the fair value of a reporting unit
is less than its carrying amount, then the quantitative test is not required to be performed. If the Company
determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount,
the Company is required to perform the quantitative test. In the quantitative test, the calculated fair value
of the reporting unit is compared to its book value including goodwill. If the fair value of the reporting unit
is in excess of its book value, the related goodwill is not impaired. If the fair value of the reporting unit is
less than its book value, an impairment loss is recognized in an amount equal to that excess, limited to the total
amount of goodwill allocated to that reporting unit.
Other indefinite-lived intangible assets consist of certain tradenames. The Company tests the carrying
value of these tradenames annually as of October 31, or more frequently when an event occurs or
circumstances change that indicates the carrying value may not be recoverable, by comparing the assets’ fair
value to its carrying value. Fair value is measured using a relief-from-royalty approach, which assumes the
fair value of the tradename is the discounted cash flows of the amount that would be paid had the Company
not owned the tradename and instead licensed the tradename from another company.
The Company performed the required annual impairment tests for goodwill and other indefinite-lived
intangible assets for the fiscal years 2024, 2023 and 2022, and found no impairment.
Impairment of Long-Lived Assets
The Company periodically evaluates the carrying value of long-lived assets (excluding goodwill and
indefinite-lived tradenames). Long-lived assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. If the sum of the expected future
undiscounted cash flows is less than the carrying amount of an asset, a loss is recognized for the difference
between the fair value and carrying value of the asset.
Debt Issuance Costs
Debt discounts and direct costs incurred in connection with the issuance or amendment of long-term
debt are deferred and recorded as a reduction of outstanding debt and amortized to interest expense using
the effective interest method over the terms of the related credit agreements. $3,242, $3,885, and $3,234 of
63
deferred financing costs and original issue discount were amortized to interest expense during fiscal years
2024, 2023 and 2022, respectively. Excluding the impact of any future long-term debt issuances or
prepayments, estimated amortization to interest expense for the next five years is as follows: 2025-$2,573;
2026-$2,544; 2027-$1,434; 2028-$437; 2029-$463.
Income Taxes
The Company is a C Corporation and therefore accounts for income taxes pursuant to the liability
method. Accordingly, the current or deferred tax consequences of a transaction are measured by applying
the provision of enacted tax laws to determine the amount of taxes payable currently or in future years.
Deferred income taxes are provided for temporary differences between the income tax basis of assets and
liabilities and their carrying amounts for financial reporting purposes. In assessing the realizability of deferred
tax assets, the Company considers whether it is more likely than not that some portion or all of the
deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the
generation of future taxable income during the years in which those temporary differences become
deductible. The Company considers taxable income in prior carryback years, the scheduled reversal of
deferred tax liabilities, projected future taxable income and tax planning strategies, as appropriate, in making
this assessment.
Revenue Recognition
The Company’s revenues primarily consist of the sale of products to its customers. The Company
considers the purchase orders, which in some cases are governed by master sales agreements, to be the
contracts with the customers. For each contract, the Company considers the commitment to transfer
products, each of which is distinct, to be the identified performance obligations. Revenue is measured as the
amount of consideration the Company expects to be entitled in exchange for the transfer of product,
which is generally the price stated in the contract specific for each item sold, adjusted for the value of expected
returns, discounts, rebates, or other promotional incentives or allowances offered to our customers. Expected
returns for damaged or defective product are estimated using the expected value method based on historical
product return experience. Discounts and rebates offered to customers are typically defined in the master sales
agreements with customers and, therefore, are recorded using the most likely amount method based on the
terms of the contract. Promotional incentives are defined programs offered for short, specific periods of time
and are estimated using the expected value method based on historical experience. The Company does not
expect the transaction price for revenue recognized will be subject to a significant revenue reversal. As the
Company’s product sale contracts and standard payment terms have a duration of less than one year, it
uses the practical expedient applicable to such contracts and does not consider the time value of money. Sales,
use, value add, and other similar taxes assessed by governmental authorities and collected concurrently
with revenue-producing activities are excluded from revenue. The Company has elected to recognize the cost
for freight activities when control of the product has transferred to the customer as an expense within cost
of goods sold in the consolidated statements of comprehensive income. Product revenues are recognized at the
point in time when control of the product is transferred to the customer, which typically occurs upon
shipment or delivery to the customer. To determine when control has transferred, the Company considers if
there is a present right to payment and if legal title, physical possession, and the significant risks and
rewards of ownership of the asset has transferred to the customer. As a substantial portion of the Company’s
product revenues are recognized at a point in time, the amount of unsatisfied performance obligations at
each period end is not material. The Company’s contracts have an original expected duration of one year or
less. As a result, the Company has elected to use the practical expedient to not disclose its remaining
performance obligations.
While the Company’s standard payment terms are less than one year, the specific payment terms and
conditions in its customer contracts vary. In some cases, customers prepay for their goods; in other cases,
after appropriate credit evaluation, an open credit line is granted and payment is due in arrears after shipment
of the product to the customer. Contracts with payment in arrears are recognized in the consolidated
balance sheets as accounts receivable upon revenue recognition, while contracts where customers pay in
advance are recognized as customer deposits and recorded in other accrued liabilities in the consolidated
balance sheets until revenue is recognized. The balance of customer deposits (contract liabilities) was $26,858
and $19,173 as of December 31, 2024, and December 31, 2023, respectively. During the year ended
64
December 31, 2024, the Company recognized revenue of $19,173 related to amounts included in the
December 31, 2023, customer deposit balance. The Company typically recognizes revenue within one year
of the receipt of the customer deposit.
The Company offers standard warranty coverage on substantially all products that it sells and accounts
for this standard warranty coverage as an assurance warranty. As such, no transaction price is allocated to
the standard warranty, and the Company records a liability for product warranty obligations at the time of
sale to a customer based on historical warranty experience. Refer to Note 11, “Product Warranty
Obligations,” to the consolidated financial statements of this Annual Report on Form 10-K for further
information regarding the Company’s standard warranties.
The Company also sells extended warranty coverage for certain products, which it accounts for as
service warranties. In most cases, the extended warranty is sold as a separate contract. As such, extended
warranty sales are considered a separate performance obligation, and the extended warranty transaction is
separate and distinct from the product. The extended warranty transaction price is initially recorded as
deferred revenue in the consolidated balance sheets and amortized on a straight-line basis to net sales in
the consolidated statements of comprehensive income over the life of the contracts, following the standard
warranty period. For extended warranty contracts that the Company sells under a third-party marketing
agreement, it is required to pay fees to the third-party service provider and classifies these fees as costs to
obtain a contract. The contract costs are deferred and recorded as other assets in the consolidated balance
sheets. The deferred contract costs are amortized as an offset to net sales in the consolidated statements of
comprehensive income consistent with how the related deferred revenue is recognized. Refer to Note 11,
“Product Warranty Obligations,” to the consolidated financial statements of this Annual Report on
Form 10-K for further information regarding the Company’s extended warranties.
In addition to extended warranties, the Company offers other services, including remote monitoring,
installation, maintenance, data center and telecom facility design and build, and grid services to utilities in
certain circumstances. Total service revenues accounted for less than 4%, 4%, and 3% of net sales during
the years ended December 31, 2024, 2023 and 2022, respectively.
Refer to Note 7, “Segment Reporting,” to the consolidated financial statements of this Annual Report
on Form 10-K for the Company’s disaggregated revenue disclosure. The information discussed above is
applicable to each of the Company’s product classes.
Advertising and Co-Op Advertising
Expenditures for advertising, included in selling and service expenses in the consolidated statements of
comprehensive income, are expensed as incurred. Expenditures for advertising production costs are expensed
when the related advertisement is first run. Expenditures for Co-Op advertising are expensed when claimed
by the customer. Total expenditures for advertising were $116,550, $118,303, and $100,589 for the years ended
December 31, 2024, 2023 and 2022, respectively.
Research and Development
The Company expenses research and development costs as incurred. Total expenditures incurred for
research and development were $219,600, $173,443, and $159,774 for the years ended December 31, 2024,
2023 and 2022, respectively.
Foreign Currency Translation and Transactions
Balance sheet amounts for non-U.S. Dollar functional currency subsidiaries are translated into U.S.
Dollars at the rates of exchange in effect at the end of the fiscal year. Income and expenses incurred in a
foreign currency are translated at the average rates of exchange in effect during the year. The related balance
sheet translation adjustments are made directly to accumulated other comprehensive loss, a component of
stockholders’ equity, in the consolidated balance sheets. Gains and losses from foreign currency transactions
are recognized as incurred in the consolidated statements of comprehensive income.
65
Fair Value of Financial Instruments
ASC 820-10, Fair Value Measurement, defines fair value, establishes a consistent framework for
measuring fair value, and expands disclosure for each major asset and liability category measured at fair
value on either a recurring basis or nonrecurring basis. ASC 820-10 clarifies that fair value is an exit price,
representing the amount that would be received in the sale of an asset or paid to transfer a liability in an
orderly transaction between market participants. As such, fair value is a market-based measurement that
should be determined based on assumptions that market participants would use in pricing an asset or
liability. As a basis for considering such assumptions, the pronouncement establishes a three-tier fair value
hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such
as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are
observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market
data, which require the reporting entity to develop its own assumptions.
The Company believes the carrying amount of its financial instruments (cash and cash equivalents,
accounts receivable, accounts payable, accrued liabilities, short-term borrowings, and revolving facility
(Revolving Facility) borrowings), excluding Term Loan borrowings, approximates the fair value of these
instruments based on their short-term nature. The fair value of the Tranche A Term Loan Facility borrowing,
which has a net carrying value of $710,715, was approximately $705,375 (Level 2) as of December 31,
2024. The fair value of the Tranche B Term Loan Facility borrowing, which has a net carrying value of
$495,936, was approximately $501,244 (Level 2) as of December 31, 2024. These Term Loan fair values were
calculated based on independent valuations which contain inputs and significant value drivers that are
observable.
For the fair value of the assets and liabilities measured on a recurring basis, excluding the contingent
consideration discussed below, refer to the fair value table in Note 5, “Derivative Instruments and Hedging
Activities,” to the consolidated financial statements of this Annual Report on Form 10-K. The fair value of
the Company’s interest rate swaps and commodity and foreign currency derivative contracts are classified
as Level 2. The valuation techniques used to measure the fair value of these derivative contracts, all of which
have counterparties with high credit ratings, were based on quoted market prices or model driven valuations
using significant inputs derived from or corroborated by observable market data. The fair value of the
derivative contracts discussed above considers the Company’s credit risk in accordance with ASC 820-10.
The fair value of the Wallbox stock warrants is classified as Level 3. The fair value of these contracts is
measured using a Black Scholes option pricing model, with significant inputs derived from or corroborated
by observable market data as well as internal estimates, specifically the time period until exercise. The
warrants received in the third quarter of 2024 and fourth quarter of 2023 expire at the earlier of when the
price per share equals or exceeds $6.00 or in 2028 and 2029, respectively. The time period until exercise
assumption has a significant impact on the fair value of the warrants.
Equity Securities
Equity securities consist of shares of Wallbox N.V’s (Wallbox) Class A common stock (Wallbox
Shares). The Wallbox Shares are classified as Level 1 in the fair value hierarchy and are recognized at fair
value using the closing price of Wallbox common stock quoted on the New York Stock Exchange (NYSE)
on the last trading day of the quarter. The investment in Wallbox Shares is included in operating lease and
other assets in the consolidated balance sheets. The fair value of the investment in Wallbox Shares was
$19,075 and $17,213 as of December 31, 2024, and December 31, 2023, respectively. Gains and losses
attributable to the Wallbox Shares are recognized in other expense, net in the consolidated statements of
comprehensive income. The loss recognized on the investment in Wallbox Shares was $30,679 for the year
ended December 31, 2024. For additional information regarding the Company’s investment in Wallbox, see
Note 5, “Derivative Instruments and Hedging Activities,” to the consolidated financial statements of this
Annual Report on Form 10-K
Contingent Consideration
Certain of the Company’s business combinations involve potential payment of future consideration
that is contingent upon the achievement of certain milestones. As part of purchase accounting, a liability is
66
recorded for the estimated fair value of the contingent consideration on the acquisition date. The fair value
of the contingent consideration is remeasured at each reporting period, and the change in fair value is
recognized within general and administrative expenses in the Company’s consolidated statements of
comprehensive income. The fair value measurement of contingent consideration is typically categorized as a
Level 3 liability, as the measurement amount is based primarily on significant inputs that are not observable
in the market.
The combined fair value of contingent consideration for Chilicon and Ageto as of December 31, 2024,
and for Chilicon and Pramac as of December 31, 2023, was $34,114 and $38,937, respectively. The contingent
consideration period for Chilicon extends through December 31, 2028, while the contingent consideration
period for Pramac extends through December 31, 2025. The contingent consideration for Ageto can be earned
in equal increments with one third of the contingent consideration capable of being earned each year as of
August 1, 2025, August 1, 2026, and August 1, 2027. The current portion of contingent consideration is
reported in other accrued liabilities and the non-current portion is reported in operating lease and other
long-term liabilities in the consolidated balance sheets.
The following table provides a reconciliation of the activity for contingent consideration:
Beginning balance, January 1, 2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 38,937
Changes in fair value(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(11,627)
Additional contingent consideration(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,911
Payment of contingent consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
Present value interest accretion
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
893
Ending balance, December 31, 2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 34,114
(1)
Represents the change in fair value of the contingent deferred consideration for the Pramac buyout.
See Note 4, “Redeemable Noncontrolling Interest”, to the consolidated financial statements of this
Annual Report on Form 10-K.
(2)
Represents $5,911 of contingent consideration related to the Ageto acquisition.
Use of Estimates
The preparation of the consolidated financial statements in conformity with U.S. GAAP requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities,
the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the
reported amounts of revenues and expenses during the reporting period. Actual results could differ from
those estimates.
Derivative Instruments and Hedging Activities
The Company records all derivatives in accordance with ASC 815, Derivatives and Hedging, which
requires derivative instruments to be reported in the consolidated balance sheets at fair value and establishes
criteria for designation and effectiveness of hedging relationships. The Company is exposed to market risk
such as changes in commodity prices, foreign currencies and interest rates. The Company does not hold or
trade derivative financial instruments for trading purposes.
Share-Based Compensation
Share-based compensation expense, including stock options and restricted stock awards, is generally
recognized on a straight-line basis over the vesting period based on the fair value of awards which are
expected to vest. The fair value of all share-based awards is estimated on the date of grant. Refer to Note 17,
“Share Plans,” to the consolidated financial statements of this Annual Report on Form 10-K for further
information on the Company’s share-based compensation plans and accounting.
New Accounting Pronouncements
Changes to GAAP are established by the Financial Accounting Standards Board (FASB) in the form
of accounting standard updates (ASUs) to the FASB Accounting Standards Codification.
67
In November 2024, the FASB issued ASU 2024-03 Income Statement — Reporting Comprehensive
Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement
Expenses. The new guidance is intended to provide investors more detailed disclosures around specific types
of expenses. The new disclosures require additional quantitative and qualitative information for certain
expenses contained within the Consolidated Statements of Comprehensive Income to be presented in the
notes to the financial statements. The update is effective for fiscal years beginning after December 15, 2026,
and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.
The disclosure updates are required to be applied prospectively with the option for retrospective application.
The Company is currently assessing the impact and timing of adopting the updated provisions.
In March 2024, the Securities and Exchange Commission (SEC) adopted a final rule under SEC
Release No. 33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors,
to enhance and standardize climate-related disclosures. The rule will require companies to disclose material
Scope 1 and Scope 2 greenhouse gas emissions; climate-related risks, governance, and oversight; and the
financial effects of severe weather events and other natural conditions. These disclosures will begin to be
phased in beginning with the Company’s annual report for the year ending December 31, 2025. While this
rule has been stayed pending the outcome of legal challenges, the Company is currently assessing the impact
of adoption on the Company’s consolidated financial statements and related disclosures in the event the
stay is lifted.
In December 2023, the FASB issued ASU 2023-09 Improvements to Income Tax Disclosures. The ASU
establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing
requirements. Under the new guidance, the Company must consistently categorize and provide greater
disaggregation of information in the rate reconciliation. It must also further disaggregate income taxes paid.
The update is effective for fiscal years beginning after December 15, 2024. Entities may apply the new
disclosures prospectively or may elect retrospective application. The Company is evaluating the impact of
the new required disclosures, but does not expect the adoption of ASU 2023-09 to have a material impact on
the Company’s consolidated financial statements.
In November 2023, the FASB issued ASU 2023-07 Segment Reporting — Improving Reportable
Segment Disclosures (Topic 280). The update is intended to improve reportable segment disclosure
requirements, primarily through enhanced disclosures about significant expenses. The ASU requires
disclosures to include significant segment expenses that are regularly provided to the chief operating decision
maker (CODM), a description of other segment items by reportable segment, and any additional measures
of a segment’s profit or loss used by the CODM when deciding how to allocate resources. The ASU also
requires all annual disclosures currently required by Topic 280 to be included in interim periods. The
update is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years
beginning after December 15, 2024, with early adoption permitted and requires retrospective application
to all prior periods presented in the financial statements. The required annual disclosures are reflected in
Note 7, “Segment Reporting,” to this Annual Report on Form 10-K and the Company will disclose the
required quarterly information beginning with the Form 10-Q for the three months ending March 31, 2025.
There have been no other recent accounting pronouncements, changes in accounting pronouncements,
or recently adopted accounting guidance during 2024 that are of significance or potential significance to the
Company’s consolidated financial statements or disclosures.
3.
Acquisitions
Fiscal 2024 Acquisitions
On November 1, 2024, the Company acquired Wolverine, headquartered in Zeeland, Michigan.
Wolverine is an industrial and residential generator distributor as well as a provider of maintenance and
repair services.
On August 1, 2024, the Company acquired the assets and liabilities of Ageto. Ageto designs and
integrates microgrid control solutions and is headquartered in Fort Collins, Colorado.
On June 26, 2024, the Company closed on the acquisition of the C&I BESS product offering from
SunGrid Solutions Inc. located in Cambridge, Canada.
68
On April 1, 2024, the Company acquired Huntington, headquartered in Shelton, Connecticut.
Huntington is an industrial and residential generator distributor as well as a provider of maintenance and
repair services.
The combined preliminary purchase price for these acquisitions was $45,825, net of cash acquired and
inclusive of holdbacks and estimated contingent consideration. The Company recorded its preliminary
purchase price allocations based on its estimates of the fair value of the acquired assets and assumed
liabilities. Purchase accounting for C&I BESS and Huntington will be finalized prior to June 30, 2025, while
purchase accounting for Ageto will be finalized prior to September 30, 2025. Purchase accounting for
Wolverine will be finalized prior to December 31, 2025. There have not been any material changes to the
preliminary purchase price allocation for Wolverine, Ageto, C&I BESS, or Huntington as of December 31,
2024. The accompanying consolidated financial statements include the results of these acquisitions from their
dates of acquisition.
Fiscal 2023 Acquisitions
On February 1, 2023, the Company acquired REFUstor, headquartered in Pfullingen, Germany.
REFUstor is a developer and supplier of battery storage hardware products, advanced software, and
platform services for the commercial and industrial energy storage market.
The Company recorded its preliminary purchase price allocation for REFUstor during the first quarter
of 2023, based on its estimates of the fair value of the acquired assets and assumed liabilities. Purchase
accounting for REFUstor was finalized in the first quarter of 2024 and did not result in material adjustments
to the Company’s preliminary estimates. The final purchase price was $16,127. The accompanying
consolidated financial statements include the results of REFUstor since the date of acquisition.
Fiscal 2022 Acquisitions
On June 30, 2022, the Company acquired EEC. Headquartered in Marlborough, Massachusetts, EEC
is an industrial generator distributor as well as a provider design, build, maintenance, and repair services for
data center and telecom facilities.
On October 3, 2022, the Company acquired Blue Pillar, an industrial IoT platform developer that
designs, deploys, and manages industrial IoT network solutions to enable distributed energy generation
monitoring and control.
The Company recorded its preliminary purchase price allocation for EEC and Blue Pillar during the
second quarter and fourth quarter of 2022, respectively, based on its estimates of the fair value of the acquired
assets and assumed liabilities. Purchase accounting for EEC was finalized in the second quarter of 2023,
and purchase accounting for Blue Pillar was finalized in the fourth quarter of 2023, neither of which resulted
in material adjustments to the Company’s preliminary estimates. The final combined purchase price for
EEC and Blue Pillar was $27,658. The accompanying consolidated financial statements include the results
of the acquired businesses since their dates of acquisition.
Pro forma and other financial information are not presented as the effects of the Company’s acquisitions
since 2022 are not material to the Company’s results of operations or financial position.
Summary Purchase Price Allocations
The fair values assigned to certain assets acquired and liabilities assumed for all acquisitions completed
since January 1, 2022, are as follows:
2024
Acquisitions
2023
Acquisitions
2022
Acquisitions
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 9,528
$
347
$11,965
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,150
1,239
2,955
Prepaid expenses and other current assets . . . . . . . . . . . . .
864
166
4,456
Property and equipment
. . . . . . . . . . . . . . . . . . . . . . . . .
824
5,843
708
69
2024
Acquisitions
2023
Acquisitions
2022
Acquisitions
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14,551
6,174
10,032
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22,536
5,363
8,714
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,712
837
1,954
Total assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . .
61,165
19,969
40,784
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,420
1,278
1,826
Accrued wages and employee benefits . . . . . . . . . . . . . . . .
1,256
264
1,662
Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . .
9,043
236
7,917
Current portion of long-term borrowings and finance lease
obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
146
—
—
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . .
803
2,007
564
Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . .
1,490
57
1,157
Long-term debt
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
182
—
Net assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . .
$45,825
$16,127
$27,658
4.
Redeemable Noncontrolling Interest
On March 1, 2016, the Company acquired a 65% ownership interest in PR Industrial S.r.l. and its
subsidiaries (Pramac). The 35% noncontrolling interest in Pramac had an acquisition date fair value of
$34,253 and was recorded as a redeemable noncontrolling interest in the consolidated balance sheets, as the
noncontrolling interest holder had within its control the right to require the Company to redeem its
interest in Pramac. In May 2021, the Company exercised its call option rights and paid a purchase price of
$27,164 to purchase an additional 15% ownership interest in Pramac, bringing the Company’s total ownership
interest in Pramac to 80%. On March 8, 2023, the Company and the noncontrolling interest holder entered
into an agreement whereby the Company acquired the remaining 20% ownership interest in Pramac for a
purchase price of $116,754, which brought the Company’s total ownership interest in Pramac to 100%.
The purchase price for the remaining 20% ownership interest included $105,264 of initial consideration,
which included a cash payment of $104,844 and a $420 gain on a foreign currency settlement in the first
quarter of 2023, and $11,490 of contingent deferred consideration of up to 135,205 restricted shares that were
issued based on the twenty day volume weighted average price of the Company’s stock ending on
December 31, 2022, and which shall vest upon achievement of certain earnings targets at the end of the earn-
out period, December 31, 2025. Accordingly, there was no redeemable noncontrolling interest related to
Pramac as of December 31, 2023. This contingent deferred consideration was reduced to zero in the fourth
quarter of 2024. Refer to Note 2, “Summary of Accounting Policies”, to the consolidated financial statements
of this Annual Report on Form 10-K for further information regarding the contingent deferred
consideration.
On February 1, 2019, the Company acquired a 51% ownership interest in Captiva Energy Solutions
Private Limited (Captiva). The 49% noncontrolling interest in Captiva had an acquisition date fair value of
$3,165 and was recorded as a redeemable noncontrolling interest in the consolidated balance sheets, as the
noncontrolling interest holder had within its control the right to require the Company to redeem its
interest in Captiva. The noncontrolling interest holder had a put option to sell his interest to the Company
any time after five years from the date of acquisition, or earlier upon the occurrence of certain circumstances.
Further, the Company had a call option that may be redeemed any time after five years from the date of
acquisition, or earlier upon the occurrence of certain circumstances. The put and call option price was based
on a multiple of earnings, subject to the terms of the acquisition agreement. In May 2022, the Company
purchased an additional 15% ownership interest in Captiva for $375, which was paid with cash on hand,
bringing the Company’s total ownership interest in Captiva to 66%. On April 5, 2024, the Company acquired
the remaining 34% ownership interest in Captiva for $9,117 of cash.
The redeemable noncontrolling interests were recorded at the greater of the initial fair value, increased
or decreased for the noncontrolling interests’ share of comprehensive income (loss), or the estimated
redemption value, with any adjustments to the redemption value impacting retained earnings, but not net
70
income. However, the redemption value adjustments are reflected in the earnings per share calculation, as
detailed in Note 14, “Earnings Per Share,” to the consolidated financial statements of this Annual Report on
Form 10-K. The following table presents the changes in the redeemable noncontrolling interest for both
Captiva and Pramac:
Year Ended December 31,
2024
2023
2022
Balance at beginning of period . . . . . . . . . . . . . . . . . . . . . . .
$ 6,549
$ 110,471
$ 58,050
Share of net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
58
1,864
7,543
Foreign currency translation rate changes . . . . . . . . . . . . . .
(176)
(549)
(3,982)
Purchase of additional ownership interest . . . . . . . . . . . . . .
(9,117)
(116,754)
(375)
Redemption value adjustment . . . . . . . . . . . . . . . . . . . . . .
2,686
11,517
49,235
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
—
$
6,549
$110,471
5.
Derivative Instruments and Hedging Activities
The Company periodically utilizes commodity derivatives and foreign currency forward purchase and
sales contracts in the normal course of business. Because these contracts do not qualify for hedge accounting,
the related gains and losses are recorded in the Company’s consolidated statements of comprehensive
income. The commodity and foreign currency forward contract gains and losses are not material to the
Company’s consolidated financial statements for the periods presented.
Additionally, the Company maintains interest rate swap agreements and owns stock warrants described
in more detail below.
Interest Rate Swaps
In 2017, the Company entered into twenty interest rate swap agreements, the final four of which
expired in May 2023. In March 2020, the Company entered into three additional interest rate swap
agreements, which were still outstanding as of December 31, 2024.
In June 2022, in conjunction with the amendments to the Company’s credit agreements discussed
further in Note 12, “Credit Agreements,” to the consolidated financial statements of this Annual Report on
Form 10-K, the Company amended its interest rate swaps to match the underlying debt and reconfirmed
hedge effectiveness. The Company formally documented all relationships between interest rate hedging
instruments and the related hedged items, as well as its risk-management objectives and strategies for
undertaking various hedge transactions. These interest rate swap agreements qualify as cash flow hedges and
therefore, the effective portions of their gains or losses are reported as a component of accumulated other
comprehensive loss (AOCL) in the consolidated balance sheets.
The amount of after-tax unrealized gains (losses) recognized for the years ended December 31, 2024,
2023 and 2022 were $(7,672), $(8,004), and $38,494, respectively. The cash flows of the swaps are recognized
as adjustments to interest expense each period. The ineffective portions of the derivatives’ changes in fair
value, if any, are immediately recognized in earnings.
See Item 7A “Quantitative and Qualitative Disclosures About Market Risk” of this Annual Report on
Form 10-K for additional information on these interest rate swaps.
Stock Warrants
During the fourth quarter of 2023, the Company entered into a $30,000 agreement with Wallbox to
purchase 5% of its Class A common stock and acquire stock warrants, the latter of which provide the rights
to an incremental approximate 5% ownership in the Class A common stock outstanding of Wallbox upon
exercise at a fixed price with anti-dilution protections for a period of time. During the third quarter of 2024,
the Company received additional warrants in connection with an additional round of funding performed
by Wallbox through the Company’s anti-dilution protection rights. In accordance with U.S. GAAP, the
71
Company is required to adjust the carrying value of these warrants to market value on a quarterly basis.
Gains and losses attributable to the stock warrants are recognized in other expense, net in the consolidated
statements of comprehensive income.
The loss attributable to the stock warrants was $7,327 for the year ended December 31, 2024.
Fair Value
The following table presents the fair value of the Company’s derivatives:
December 31,
2024
2023
Interest rate swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$28,367
$38,601
Stock warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,919
14,862
The fair values of the interest rate swaps and stock warrants are included in operating lease and other
assets in the consolidated balance sheet as of December 31, 2024 and December 31, 2023. Excluding the
impact of credit risk, the fair value of the interest rate swaps as of December 31, 2024, and December 31,
2023, is an asset of $29,254 and $39,796, respectively, which represents the net amount the Company would
receive to exit all of the agreements on that date.
6.
Accumulated Other Comprehensive Loss
The following presents a tabular disclosure of changes in AOCL during the years ended December 31,
2024 and 2023, net of tax:
Foreign
Currency
Translation
Adjustments
Unrealized
Gain (Loss) on
Cash Flow
Hedges
Total
Beginning Balance – January 1, 2024 . . . . . . . . . . . . . . . .
$ (43,582)
$28,439
$(15,143)
Current-period comprehensive income (loss) . . . . . . . . .
(62,584)(1)
(7,672)(2)
(70,256)
Ending Balance – December 31, 2024 . . . . . . . . . . . . . . . .
$(106,166)
$20,767
$(85,399)
Foreign
Currency
Translation
Adjustments
Unrealized
Gain (Loss) on
Cash Flow
Hedges
Total
Beginning Balance – January 1, 2023 . . . . . . . . . . . . . . . .
$(101,545)
$36,443
$(65,102)
Current-period comprehensive income (loss) . . . . . . . . .
57,963(3)
(8,004)(4)
49,959
Ending Balance – December 31, 2023 . . . . . . . . . . . . . . . .
$ (43,582)
$28,439
$(15,143)
(1)
Represents unfavorable impact from the strengthening of the U.S. dollar against foreign currencies
during the year ended December 31, 2024, particularly the Euro, British Pound, and Mexican Peso.
(2)
Represents unrealized losses of $(10,235) on the interest rate swaps, net of tax effect of $2,563 for the
year ended December 31, 2024.
(3)
Represents favorable impact from the weakening of the U.S. dollar against foreign currencies during
the year ended December 31, 2023, particularly the Euro, British Pound, and Mexican Peso.
(4)
Represents unrealized losses of $(10,678) on the interest rate swaps, net of tax effect of $2,674 for the
year ended December 31, 2023.
7.
Segment Reporting
The Company has two reportable segments for financial reporting purposes — domestic and
international. The domestic segment includes the legacy Generac business and all historical acquisitions
based in the U.S. and Canada, all of which have revenues substantially derived from the U.S. and Canada.
72
The international segment includes all historical acquisitions not based in the U.S and Canada, all of which
have revenues substantially derived from outside the U.S and Canada. Both reportable segments design
and manufacture a wide range of energy technology solutions and other power products. The Company has
multiple operating segments, which it aggregates into the two reportable segments, based on materially
similar economic characteristics, products, production processes, classes of customers, distribution methods,
organizational structure, and regional considerations. Intersegment sales are at an appropriate transfer
price.
The Company’s product offerings consist primarily of power generation equipment, energy storage
systems, energy management devices & solutions, and other power products geared for varying end customer
uses. While Residential products and Commercial & Industrial (C&I) products include similar products,
they differ based on power output and end customer. The composition of net sales between residential, C&I,
and other products & services by reportable segment is as follows:
Net Sales by Segment
Year Ended December 31, 2024
Product Classes
Domestic
International
Total
Residential products . . . . . . . . . . . . . . . . . . . . . . . . . .
$2,352,629
$ 80,845
$2,433,474
Commercial & Industrial products . . . . . . . . . . . . . . . .
828,586
560,883
1,389,469
Other
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
417,934
54,957
472,891
Total net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$3,599,149
$696,685
$4,295,834
Year Ended December 31, 2023
Product Classes
Domestic
International
Total
Residential products . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,945,273
$117,656
$2,062,929
Commercial & Industrial products . . . . . . . . . . . . . . . .
916,118
578,681
1,494,799
Other
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
414,933
50,006
464,939
Total net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$3,276,324
$746,343
$4,022,667
Year Ended December 31, 2022
Product Classes
Domestic
International
Total
Residential products . . . . . . . . . . . . . . . . . . . . . . . . . .
$2,782,037
$129,834
$2,911,871
Commercial & Industrial products . . . . . . . . . . . . . . . .
746,172
514,565
1,260,737
Other
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
339,657
52,472
392,129
Total net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$3,867,866
$696,871
$4,564,737
Residential products consist primarily of automatic home standby generators ranging in output from
7.5kW to 150kW, portable generators, residential energy storage systems, energy management devices &
solutions, and other outdoor power equipment. These products are predominantly sold through independent
residential dealers, national and regional retailers, e-commerce merchants, electrical/HVAC/solar wholesalers,
solar installers, and outdoor power equipment dealers. The residential products revenue consists of the
sale of the product to the Company’s distribution partners, who in turn sell the product to the end consumer,
including installation and maintenance services. In some cases, residential products are sold directly to the
end consumer. Substantially all of the residential products’ revenues are transferred to the customer at a point
in time.
C&I products consist of larger output stationary generators used in C&I applications, with power
outputs up to 3,250kW. Also included in C&I products are mobile generators, light towers, C&I battery
energy storage systems, mobile heaters, mobile pumps, and related controls for power generation equipment.
These products are sold globally through industrial distributors and dealers, Engineering, Procurement,
and Construction (EPC) companies, equipment rental companies, and equipment distributors. The C&I
products revenue consists of the sale of the product to the Company’s distribution partners, who in turn sell
or rent the product to the end customer, including installation and maintenance services. In some cases,
73
C&I products are sold directly to the end customer. Substantially all of the C&I products’ revenues are
transferred to the customer at a point in time.
Other consists primarily of aftermarket service parts and product accessories sold to the Company’s
distribution partners, the amortization of extended warranty deferred revenue, remote monitoring and grid
services subscription revenue, as well as certain design, build, installation, and maintenance service revenue.
The aftermarket service parts and product accessories are generally transferred to the customer at a point in
time, while the extended warranty and subscription revenue are recognized over the life of the contract.
Other service revenue is recognized when the service is performed, sometimes after certain milestones are
met.
The Company views Adjusted EBITDA as a key measure of the Company’s performance. The
computation of Adjusted EBITDA is based primarily on the definition that is contained in the Company’s
credit agreements. The Company presents Adjusted EBITDA not only due to its importance for purposes of
the Company’s credit agreements, but also because it assists the Company in comparing performance
across reporting periods on a consistent basis as it excludes items the Company’s management does not
believe are indicative of the Company’s core operating performance. The Company’s Chief Operating
Decision Maker (CODM) is Aaron Jagdfeld, President and Chief Executive Officer (CEO). He uses Adjusted
EBITDA, along with the Company’s management:
• for planning purposes, including the preparation of the Company’s annual operating budget and
developing and refining internal projections for future periods;
• to allocate resources to enhance the financial performance of the Company’s business;
• as a target for the determination of the bonus component of compensation for the Company’s senior
executives under the Company’s management incentive plan, as described further in the Company’s
Proxy Statement;
• to evaluate the effectiveness of the Company’s business strategies and as a supplemental tool in
evaluating the Company’s performance against the Company’s budget for each period; and
• in communications with the Company’s Board and investors concerning the Company’s financial
performance.
See “Non-GAAP measures — Adjusted EBITDA” in Item 7 of this Annual Report on Form 10-K for
more information on the Company’s use of Adjusted EBITDA. The table below presents sales (external and
intersegment), significant segment expenses, and Adjusted EBITDA by reportable segment, reconciled to
consolidated income before provision for income taxes.
Year Ended December 31, 2024
Year Ended December 31, 2023
Year Ended December 31, 2022
Domestic
International
Total
Domestic
International
Total
Domestic
International
Total
External net sales . . . . . . $3,599,149
696,685
$4,295,834 $3,276,324
$746,343
$4,022,667 $3,867,866
$696,871
$4,564,737
Intersegment sales . . . . . .
35,932
28,700
64,632
43,937
91,552
135,489
60,731
93,699
154,430
Total sales . . . . . . . . . .
3,635,081
725,385
4,360,466
3,320,261
837,895
4,158,156
3,928,597
790,570
4,719,167
Elimination of intersegment
sales . . . . . . . . . . . .
—
—
(64,632)
—
—
(135,489)
—
—
(154,430)
Costs of goods sold . . . . .
2,155,269
539,571
2,694,840
2,168,210
624,515
2,792,725
2,604,124
593,039
3,197,163
Elimination of intersegment
cost of goods sold
. . . .
—
—
(64,632)
—
—
(135,489)
—
—
(154,430)
Operating expenses . . . . .
991,042
137,842
1,128,884
839,827
139,405
979,232
833,896
121,778
955,674
Other segment items(1) . . .
(204,433)
(47,926)
(252,359)
(211,113)
(40,547)
(251,660)
(225,725)
(33,312)
(259,037)
Adjusted EBITDA by
reportable segment . . . . $ 693,203
$ 95,898
789,101 $ 523,337
$114,522
637,859 $ 716,302
$109,065
825,367
Interest expense . . . . . . .
(89,713)
(97,627)
(54,826)
Depreciation and
amortization
. . . . . . .
(171,768)
(166,602)
(156,141)
74
Year Ended December 31, 2024
Year Ended December 31, 2023
Year Ended December 31, 2022
Domestic
International
Total
Domestic
International
Total
Domestic
International
Total
Non-cash write-down and
other adjustments(2)
. . .
(4,757)
5,953
2,091
Non-cash share-based
compensation
expense(3) . . . . . . . . .
(49,248)
(35,492)
(29,481)
Transaction costs and credit
facility fees(4) . . . . . . .
(5,097)
(4,054)
(5,026)
Business optimization and
other charges(5) . . . . . .
(4,752)
(10,551)
(4,371)
Provision for legal,
regulatory, and clean
energy product
charges(6) . . . . . . . . .
(10,931)
(38,490)
(65,265)
Change in fair value of
investment(7)
. . . . . . .
(38,006)
—
—
Loss on extinguishment of
debt(8) . . . . . . . . . . .
(4,861)
—
(3,743)
Other . . . . . . . . . . . . .
(530)
(696)
(139)
Income before provision for
income taxes
. . . . . . .
$ 409,438
$ 290,300
$ 508,466
(1)
Other segment items primarily represent depreciation and amortization and the following items
defined below: Non-cash write-down and other adjustments; Non-cash shared-based compensation
expense; Transaction costs and credit facility fees; Business optimization and other charges; Provision
for legal, regulatory, and clean energy product charges.
(2)
Includes gains/(losses) on dispositions of assets other than in the ordinary course of business, gains/
(losses) on sales of certain investments, unrealized mark-to-market adjustments on commodity contracts,
certain foreign currency related adjustments, and certain purchase accounting and contingent
consideration adjustments.
(3)
Represents share-based compensation expense to account for stock options, restricted stock, and other
stock awards over their respective vesting periods.
(4)
Represents transaction costs incurred directly in connection with any investment, as defined in the
Company’s credit agreement, equity issuance or debt issuance or refinancing, together with certain fees
relating to the Company’s senior secured credit facilities, such as administrative agent fees and credit
facility commitment fees under the Company’s Amended Credit Agreement.
(5)
Represents severance and other restructuring charges related to the consolidation of certain operating
facilities and organizational functions.
(6)
Represents the following litigation, regulatory, and other matters that are not indicative of our ongoing
operations:
• A provision for judgments, settlements, and legal expenses related to certain patent lawsuits — $9,299
in 2024; $27,289 in 2023.
• Legal expenses related to certain class action lawsuits — $1,267 in 2024; $1,051 in 2023.
• A bad debt provision and additional customer support costs related to a clean energy product
customer that filed for bankruptcy in 2022 — $365 and $4,350 additional customer support costs in
2024 and 2023, respectively; $17,926 bad debt provision in 2022.
• A warranty provision to address clean energy product warranty-related matters — $37,338 in 2022.
• A provision for a matter with the CPSC concerning the imposition of civil fines for allegedly failing
to timely submit a report under the CPSA in relation to certain portable generators that were subject
to a voluntary recall previously announced on July 29, 2021 — $5,800 in 2023 and $10,000 in 2022.
75
(7)
Represents non-cash losses from changes in the fair value of the Company’s investment in Wallbox
warrants and equity securities.
(8)
Represents fees paid to creditors and the write-off of the unamortized original issue discount and
deferred financing costs in connection with the 2024 and 2022 credit agreement refinancings. Refer to
Note 12, “Credit Agreements,” to the consolidated financial statements of this Annual Report on
Form 10-K for further information on the losses on extinguishment of debt.
The following tables summarize additional financial information by reportable segment:
Assets
December 31,
2024
2023
2022
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$3,873,904
$3,770,883
$4,032,086
International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,235,427
1,322,429
1,137,376
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$5,109,331
$5,093,312
$5,169,462
Depreciation and Amortization
Year Ended December 31,
2024
2023
2022
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$135,434
$129,648
$123,768
International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
36,334
36,954
32,373
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$171,768
$166,602
$156,141
Capital Expenditures
Year Ended December 31,
2024
2023
2022
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$117,836
$103,036
$69,680
International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18,897
26,024
16,508
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$136,733
$129,060
$86,188
The Company’s sales in the United States represent approximately 79%, 77%, and 80% of total sales for
the years ended December 31, 2024, 2023 and 2022, respectively. Approximately 76% and 74% of the
Company’s identifiable long-lived assets are located in the United States as of December 31, 2024 and 2023,
respectively.
8.
Balance Sheet Details
Inventories consist of the following:
December 31,
2024
2023
Raw material . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 611,735
$ 677,428
Work-in-process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6,814
10,877
Finished goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
413,098
479,179
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,031,647
$1,167,484
Property and equipment consists of the following:
December 31,
2024
2023
Land and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
30,220
$
22,556
Buildings and improvements
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
358,055
298,483
76
December 31,
2024
2023
Machinery and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
296,409
271,879
Dies and tools
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
48,681
45,998
Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13,887
11,411
Office & information technology equipment and internal use software .
213,003
185,601
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9,776
8,772
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
110,651
98,083
Gross property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . .
1,080,682
942,783
Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(390,659)
(344,206)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 690,023
$ 598,577
Total property and equipment included finance leases of $61,214 and $68,079 as of December 31, 2024
and 2023, respectively, primarily comprised of buildings and improvements. Amortization of finance lease
right of use assets is recorded within depreciation expense in the consolidated statements of comprehensive
income. The initial measurement of new finance lease right of use assets is accounted for as a non-cash
item in the consolidated statements of cash flows. Similarly, the buyout of finance lease obligations is
accounted for as a non-cash exchange of the ROU asset for the underlying leased asset. In 2024, the Company
purchased the property under lease from a related party previously determined to be an arm’s length
transaction. Refer to Note 10, “Leases,” to the consolidated financial statements of this Annual Report on
Form 10-K for further information regarding the Company’s accounting for leases under ASC 842, Leases.
9.
Goodwill and Intangible Assets
The changes in the carrying amount of goodwill by reportable segment for the years ended December 31,
2024 and 2023 are as follows:
Domestic
International
Total
Balance as of December 31, 2022 . . . . . . . . . . . . . . . . .
$1,016,657
$384,223
$1,400,880
Acquisitions of businesses, net . . . . . . . . . . . . . . . . .
1,376
5,363
6,739
Foreign currency translation rate changes . . . . . . . . . .
495
24,270
24,765
Balance as of December 31, 2023 . . . . . . . . . . . . . . . . .
1,018,528
413,856
1,432,384
Acquisitions of businesses, net . . . . . . . . . . . . . . . . .
22,641
—
22,641
Foreign currency translation rate changes . . . . . . . . . .
(22)
(18,742)
(18,764)
Balance as of December 31, 2024 . . . . . . . . . . . . . . . . .
$1,041,147
$395,114
$1,436,261
Refer to Note 3, “Acquisitions,” to the consolidated financial statements of this Annual Report on
Form 10-K for further information regarding the Company’s acquisitions.
Goodwill applicable to each reportable segment as of December 31, 2024 and 2023 is as follows:
Year Ended December 31, 2024
Year Ended December 31, 2023
Gross
Accumulated
Impairment
Net
Gross
Accumulated
Impairment
Net
Domestic . . . . . . . . . . . .
$1,544,340
$(503,193)
$1,041,147
$1,521,721
$(503,193)
$1,018,528
International . . . . . . . . . .
399,725
(4,611)
395,114
418,467
(4,611)
413,856
Total . . . . . . . . . . . . . .
$1,944,065
$(507,804)
$1,436,261
$1,940,188
$(507,804)
$1,432,384
77
The following table summarizes intangible assets by major category as of December 31, 2024 and 2023:
Weighted
Average
Amortization
Years
December 31, 2024
December 31, 2023
Gross
Accumulated
Amortization
Net Book
Value
Gross
Accumulated
Amortization
Net Book
Value
Finite-lived intangible assets:
Tradenames
. . . . . . . . . . . .
15
$ 160,473
$ (81,083) $ 79,390 $ 159,671
$ (70,997) $ 88,674
Customer lists . . . . . . . . . . .
12
591,745
(439,008)
152,737
589,318
(404,805)
184,513
Patents and technology
. . . . .
14
673,425
(294,330)
379,095
670,099
(252,658)
417,441
Software . . . . . . . . . . . . . . .
—
1,046
(1,046)
—
1,046
(1,046)
—
Non-compete/other . . . . . . . .
5
76,251
(56,225)
20,026
71,570
(44,443)
27,127
Total finite-lived intangible
assets . . . . . . . . . . . . . .
$1,502,940
$(871,692) $631,248 $1,491,704
$(773,949) $717,755
Indefinite-lived tradenames . . .
127,274
—
127,274
128,321
—
128,321
Total intangible assets . . . . . . . .
$1,630,214
$(871,692) $758,522 $1,620,025
$(773,949) $846,076
Amortization expense of intangible assets was $97,743, $104,194, and $103,320 in 2024, 2023 and
2022, respectively. Excluding the impact of future acquisitions or divestitures, the Company estimates
amortization expense for the next five years to be as follows: 2025-$93,975; 2026-$87,236; 2027-$60,387;
2028-$53,620; 2029-$50,234.
10.
Leases
The Company leases certain manufacturing facilities, distribution centers, office space, warehouses,
automobiles, machinery and computer equipment globally under both finance and operating leases. The
Company’s leases have remaining lease terms of up to approximately 16 years, of which certain leases,
primarily within the buildings and improvements asset class, include options to extend for up to 10
additional years.
The Company determines if an arrangement is or contains a lease at contract inception. The Company
recognizes a right of use (ROU) asset and lease liability at the lease commencement date based on the present
value of the lease payments over the lease term. As the Company’s leases generally do not provide an
implicit interest rate, the incremental borrowing rate is used to determine the present value of lease payments.
The incremental borrowing rate is a collateralized rate determined based on the lease term, the Company’s
credit rating, and other market information available at the commencement date. The ROU asset also includes
any lease payments made prior to the commencement date and is reduced by any lease incentives. The
lease term may include options to extend or terminate the lease when it is reasonably certain that the
Company will exercise that option. Lease expense for operating leases is recognized on a straight-line basis
over the lease term, while lease expense for finance leases is recognized as depreciation and interest expense
using the effective interest method. The Company’s variable lease expense generally consists of property
tax and insurance payments that are variable in nature, however, these amounts are immaterial to the
consolidated financial statements and are therefore not separately reported.
The Company has lease agreements with both lease and non-lease components, which it elected to
account for as a single lease component. However, the Company did not elect to apply the recognition
exception for short-term leases. The Company is applying these elections to all asset classes.
The Company is a lessor of certain of its C&I mobile products as part of a rental fleet, as well as three
of its buildings that it leases to third parties. The lease income related to these arrangements is not material
to the consolidated financial statements.
The Company records its operating lease cost and amortization of finance lease ROU assets within
cost of goods sold or operating expenses in the consolidated statements of comprehensive income depending
on the cost center of the underlying asset. The Company records its finance lease interest cost within
interest expense in the consolidated statements of comprehensive income.
78
The components of total lease cost consist of the following:
Year Ended December 31,
2024
2023
2022
Operating lease cost
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$46,887
$38,980
$36,292
Finance lease cost:
Amortization of ROU assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,639
4,142
3,298
Interest on lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,323
2,540
1,945
Total lease cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$59,849
$45,662
$41,535
Supplemental balance sheet information related to the Company’s leases is as follows:
December 31,
2024
2023
Operating leases:
Operating lease ROU assets(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 57,999
$ 70,937
Operating lease liabilities – current(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
29,316
29,388
Operating lease liabilities – noncurrent(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
29,173
44,760
Total operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
58,489
74,148
Finance leases:
Finance lease ROU assets, gross . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
78,801
82,744
Accumulated depreciation – finance lease ROU assets . . . . . . . . . . . . . . . . . . . .
(17,587)
(14,665)
Finance lease ROU assets, net(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
61,214
68,079
Finance lease liabilities – current(5)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6,845
3,785
Finance lease liabilities – noncurrent(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
59,510
67,523
Total finance lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 66,355
$ 71,308
(1)
Recorded in the operating lease and other assets line within the consolidated balance sheets
(2)
Recorded in the other accrued liabilities line within the consolidated balance sheets
(3)
Recorded in the operating lease and other long-term liabilities line within the consolidated balance
sheets
(4)
Recorded in the property and equipment, net line within the consolidated balance sheets
(5)
Recorded in the current portion of long-term borrowings and finance lease obligations line within the
consolidated balance sheets
(6)
Recorded in the long-term borrowings and finance lease obligations line within the consolidated
balance sheets
Supplemental cash flow information related to the Company’s leases is as follows:
Year Ended December 31,
2024
2023
2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows – operating leases . . . . . . . . . . . . . . . . . . . . . . . .
$48,089
$39,073
$36,020
Operating cash flows – finance leases
. . . . . . . . . . . . . . . . . . . . . . . . .
4,924
2,409
1,919
Financing cash flows – finance leases . . . . . . . . . . . . . . . . . . . . . . . . .
45,906
3,618
4,931
ROU assets obtained in exchange for lease liabilities
Operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$41,389
$17,830
$28,766
Finance leases
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
43,799
47,715
2,874
79
Weighted average remaining lease term and discount rate information related to the Company’s leases
as of December 31, 2024 and 2023 is as follows:
December 31,
2024
2023
Weighted average remaining lease term (in years)
Operating Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.27
4.55
Finance Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.92
5.34
Weighted average discount rate
Operating Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.03% 4.63%
Finance Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.03% 6.64%
The maturities of the Company’s lease liabilities as of December 31, 2024, are as follows:
Finance
Leases
Operating
Leases
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 11,118
$31,427
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,395
7,963
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,156
7,205
2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9,593
5,712
2029 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,327
4,035
After 2029 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
41,520
11,211
Total minimum lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
91,109
67,553
Interest component . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(24,754)
(9,064)
Present value of minimum lease payments . . . . . . . . . . . . . . . . . . . . . .
$ 66,355
$58,489
11.
Product Warranty Obligations
The Company records a liability for standard product warranty obligations accounted for as assurance
warranties at the time of sale of the related product to a customer based on historical warranty experience.
The Company also records a liability for specific warranty matters when they become known and are
reasonably estimable. The following is a tabular reconciliation of the Company’s standard product warranty
liability accounted for as an assurance warranty:
Year Ended December 31,
2024
2023
2022
Balance at beginning of period . . . . . . . . . . . . . . . . . . . . . .
$116,408
$138,011
$ 94,213
Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(88,990)
(92,200)
(77,476)
Provision for warranty issued . . . . . . . . . . . . . . . . . . . . . .
77,802
67,104
80,340
Changes in estimates for pre-existing warranties(1) . . . . . . .
5,767
3,493
40,934
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . .
$110,987
$116,408
$138,011
(1)
Includes a specific warranty provision of $37,338 recorded during the third quarter of 2022 to address
certain clean energy product warranty related matters.
The Company also sells extended warranty coverage for certain products, which it accounts for as a
service warranty. The sales of extended warranties are recorded as deferred revenue, and typically have a
duration of five to ten years. The deferred revenue related to extended warranty coverage is amortized over
the duration of the extended warranty contract period, following the standard warranty period, using the
straight-line method. The Company believes the straight-line method is appropriate because the
performance obligation is satisfied based on the passage of time. The amortization of deferred revenue is
80
recorded to net sales in the consolidated statements of comprehensive income. The following is a tabular
reconciliation of the deferred revenue related to extended warranty coverage:
Year Ended December 31,
2024
2023
2022
Balance at beginning of period . . . . . . . . . . . . . . . . . . . . . .
$155,870
$132,813
$111,647
Deferred revenue contracts issued . . . . . . . . . . . . . . . . . . .
60,651
48,107
42,869
Amortization of deferred revenue contracts . . . . . . . . . . . .
(29,599)
(25,050)
(21,703)
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . .
$186,922
$155,870
$132,813
The timing of recognition of the Company’s deferred revenue balance related to extended warranties as
of December 31, 2024 is as follows:
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 34,069
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
35,267
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
32,315
2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25,822
2029 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19,897
After 2029 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
39,552
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$186,922
The Company has a post-sale extended warranty marketing agreement with a third party, pursuant to
which the Company is required to pay fees to the third-party service provider based on the number of
extended warranty contracts the provider sells, which it classifies as costs to obtain a contract. These fees
are deferred and recorded as other assets in the consolidated balance sheets, and are then amortized to net
sales in the consolidated statements of comprehensive income over the same period that the underlying
deferred revenue is recognized. Deferred contract costs as of December 31, 2024 and 2023 were $17,140
and $10,153, respectively. Amortization of deferred contract costs recorded during the years ended
December 31, 2024, 2023 and 2022 was $2,958, $2,306, and $1,932, respectively.
Standard product warranty obligations and extended warranty related deferred revenues are included
in the consolidated balance sheets as follows:
December 31,
2024
2023
Product warranty liability:
Current portion – Accrued product warranty . . . . . . . . . . . . . . . . . . .
$ 56,127
$ 65,298
Long-term portion – other long-term liabilities . . . . . . . . . . . . . . . . . .
54,860
51,110
Total
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$110,987
$116,408
Deferred revenue related to extended warranties:
Current portion – other accrued liabilities . . . . . . . . . . . . . . . . . . . . .
$ 34,069
$ 28,203
Long-term portion – Deferred revenue
. . . . . . . . . . . . . . . . . . . . . . .
152,853
127,667
Total
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$186,922
$155,870
12.
Credit Agreements
Short-term borrowings included in the consolidated balance sheets as of December 31, 2024, and
December 31, 2023, consisted of borrowings by the Company’s foreign subsidiaries on local lines of credit
totaling $55,848 and $81,769, respectively. As of December 31, 2024, and December 31, 2023, the weighted-
average interest rates on the short-term borrowings were 5.44% and 6.54%, respectively.
81
Long-term borrowings are included in the consolidated balance sheets as follows:
December 31,
2024
2023
Tranche A Term Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 712,500
$ 745,313
Tranche B Term Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
498,750
530,000
Original issue discount and deferred financing costs
. . . . . . . . . . . . .
(8,203)
(12,685)
Revolving Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
150,000
Finance lease obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
66,355
71,308
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,972
9,512
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,278,374
1,493,448
Less: current portion of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
60,753
42,110
Less: current portion of finance lease obligation . . . . . . . . . . . . . . . .
6,845
3,785
Total long-term borrowings and finance lease obligations . . . . . . . .
$1,210,776
$1,447,553
Both the Tranche A Term Loan Facility and Revolving Facility mature on June 29, 2027. The Tranche
A Term Loan Facility is repayable in quarterly installments commencing September 2023, with a balloon
payment due June 2027. The Tranche B Term Loan Facility matures on July 3, 2031, and is repayable in
quarterly installments commencing September 2024, with a balloon payment due July 2031. Maturities of the
Company’s Tranche A Term Loan Facility, Tranche B Term Loan Facility, and Revolving Facility
outstanding on December 31, 2024, before considering original issue discount and deferred financing costs,
are as follows:
Tranche A
Term Loan
Facility
Tranche B
Term Loan
Facility
Revolving
Facility
Total
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 46,875
$
5,000
$
—
$
51,875
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
65,625
5,000
—
70,625
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
600,000
5,000
—
605,000
2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
5,000
—
5,000
2029 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
5,000
—
5,000
2030 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
5,000
—
5,000
2031 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
468,750
—
468,750
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$712,500
$498,750
$
—
$1,211,250
Prior to June 2022, the Company’s credit agreements provided for a $1,200,000 Tranche B Term Loan
Facility (Original Term Loan B Facility) and included a $300,000 uncommitted incremental term loan on
that facility. After several amendments, the Original Term Loan B Facility bore interest at rates based on
either a base rate plus an applicable margin of 0.75% or adjusted SOFR rate plus an applicable margin of
1.75%, subject to a SOFR floor of 0.0%, and was scheduled to mature on December 13, 2026. The
Company’s credit agreements also provided for a senior secured ABL revolving credit facility (ABL Facility).
ABL Facility borrowings initially bore interest at rates based on either a base rate plus an applicable
margin of 1.00% or adjusted LIBOR rate plus an applicable margin of 2.00%, in each case, subject to
adjustments based on average availability under the ABL Facility.
In June 2022, the Company amended and restated its existing credit agreements (Amended Credit
Agreement) that resulted in a new term loan facility in an aggregate principal amount of $750,000 (Tranche
A Term Loan Facility), established a new $1,250,000 revolving facility (Revolving Facility), terminated
the former ABL Facility, and replaced all LIBOR provisions with SOFR provisions. Proceeds received by
the Company from the Tranche A Term Loan Facility were used to retire the Company’s former ABL Facility
and to make a $250,000 voluntary prepayment on the original Term Loan B Facility, with the remaining
funds used for future general corporate purposes. As a result of these prepayments, the Company wrote off
82
$3,546 of original issue discount and deferred financing costs during the second quarter of 2022 as a loss
on extinguishment of debt. Additionally, in accordance with ASC 470-50, the Company capitalized $10,330
of fees paid to creditors as deferred financing costs on long-term borrowings and expensed $800 of
transaction fees. The Company evaluated on a lender-by-lender basis if the debt related to returning lenders
on the Revolving Facility was significantly modified or not, resulting in the write-off of $197 unamortized
deferred financing costs related to the former ABL Facility as a loss on extinguishment of debt.
During 2022, the Tranche A Term Loan Facility and the Revolving Facility bore interest at a rate
based on adjusted SOFR plus an applicable margin of 1.5% through December 31, 2022, subject to a
SOFR floor of 0.0%. Beginning on January 1, 2023, the Tranche A Term Loan Facility and the Revolving
Facility bear interest at a rate based on adjusted SOFR plus an applicable margin between 1.25% and 1.75%,
based on the Company’s total leverage ratio and subject to a SOFR floor of 0.0%. As of December 31,
2024, the interest rates for the Tranche A Term Loan Facility and Revolving Facility are 6.15% and 6.19%,
respectively.
In July 2024, the Company extinguished the $530,000 balance then outstanding under the former
Tranche B Term Loan Facility and replaced it with a new $500,000 Tranche B Term Loan Facility maturing
on July 3, 2031. The new Tranche B Term Loan Facility continues to include a $300,000 uncommitted
incremental term loan on that facility. In accordance with ASC 470-50, the Company capitalized $2,991 of
debt issuance costs. Additionally, the Company wrote-off $4,236 of unamortized deferred financing costs
related to the former Tranche B Term Loan Facility and expensed $625 of fees paid to creditors as a loss
on extinguishment of debt. The new Tranche B Term Loan Facility bears interest at the adjusted SOFR rate
plus an applicable margin of 1.75%, subject to a SOFR floor of 0.0%. As of December 31, 2024, the
interest rate for the Tranche B Term Loan Facility is 6.34%.
The Tranche A Term Loan Facility and the Revolving Facility contain certain financial covenants that
require the Company to maintain a total leverage ratio below 3.75 to 1.00, an interest coverage ratio above
3.00 to 1.00, and may require an excess cash flow payment. As of December 31, 2024, the Company’s total
leverage ratio was 1.33 to 1.00, and the Company’s interest coverage ratio was 10.03 to 1.00. The Company
also was not required to make an excess cash flow payment as of December 31, 2024. The Company was also
in compliance with all other covenants of the Amended Credit Agreement as of December 31, 2024.
The Tranche B Term Loan Facility, Tranche A Term Loan Facility and Revolving Facility are guaranteed
by substantially all of the Company’s wholly-owned domestic restricted subsidiaries and are secured by
associated collateral agreements which pledge a first priority lien on virtually all of the Company’s assets,
including fixed assets and intangibles, cash, trade accounts receivable, inventory, and other current assets and
proceeds thereof.
As of December 31, 2024, there were no borrowings under the Revolving Facility, leaving $1,249,203 of
unused capacity, net of outstanding letters of credit.
13.
Stock Repurchase Programs
In July 2022, the Company’s Board approved a stock repurchase program, which commenced on
August 5, 2022, and allowed for the repurchase of up to $500,000 of the Company’s common stock over a 24-
month period. Additionally, on February 12, 2024, the Company’s Board approved a new stock repurchase
program that authorizes repurchases of up to $500,000 of the Company’s common stock over the following
24 months. The new program replaced the prior share repurchase program, which had $26,297 remaining
available for repurchase when the new program was approved. Pursuant to the approved program, the
Company may repurchase its common stock from time to time, in amounts and at prices the Company deems
appropriate, subject to market conditions and other considerations. The repurchases may be executed
using a combination of Rule 10b5-1 trading plans, open market purchases, privately negotiated agreements,
or other transactions. The actual timing, number and value of shares repurchased under the program will
be determined by management at its discretion and in compliance with the terms of the Company’s credit
agreements. The repurchases may be funded with cash on hand, available borrowings, or proceeds from
potential debt or other capital markets sources. The stock repurchase program may be suspended or
discontinued at any time without prior notice. As of December 31, 2024, the remaining unused buyback
authorization was $347,257.
83
During the year ended December 31, 2024, the Company repurchased 1,046,351 shares of its common
stock for $152,743. During the year ended December 31, 2023, the Company repurchased 2,188,475 shares
of its common stock for $251,513. During the year ended December 31, 2022, the Company repurchased
2,722,007 shares of its common stock for $345,840. The Company has periodically reissued shares out of
Treasury stock, including for acquisition contingent consideration payments.
14.
Earnings Per Share
Basic earnings per share is calculated by dividing net income attributable to the common shareholders
of the Company by the weighted average number of common shares outstanding during the period, exclusive
of restricted shares. Except where the result would be anti-dilutive, diluted earnings per share is calculated
by assuming the vesting of unvested restricted stock and the exercise of stock options, as well as the satisfaction
of certain conditions related to acquisition contingent consideration as of the end of the period. Refer to
Note 4, “Redeemable Noncontrolling Interest,” to the consolidated financial statements of this Annual
Report on Form 10-K for further information regarding the accounting for redeemable noncontrolling
interests within earnings per share.
The following table reconciles the numerator and the denominator used to calculate basic and diluted
earnings per share:
Year Ended December 31,
2024
2023
2022
Numerator
Net income attributable to Generac Holdings Inc.
. . . . . . . . . .
$
316,315
$
214,606
$
399,502
Redemption value adjustment . . . . . . . . . . . . . . . . . . . . . . . . .
8,941
(11,517)
(49,235)
Net income attributable to common shareholders . . . . . . . . .
$
325,256
$
203,089
$
350,267
Denominator
Weighted average shares, basic . . . . . . . . . . . . . . . . . . . . . . . .
59,559,797
61,265,060
63,117,007
Dilutive effect of stock compensation awards(1) . . . . . . . . . . . .
790,615
793,327
1,087,219
Dilutive effect of contingently issued shares . . . . . . . . . . . . . . .
—
—
477,131
Diluted shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
60,350,412
62,058,387
64,681,357
Net income attributable to common shareholders per share
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
5.46
$
3.31
$
5.55
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
5.39
$
3.27
$
5.42
(1)
For the years ended December 31, 2024, December 31, 2023, and December 31, 2022, excludes
approximately 428,000, 348,000 and 76,000 stock options and restricted stock awards, respectively, as
the impact of such awards was anti-dilutive.
15.
Income Taxes
The Company’s provision for income taxes consists of the following:
Year Ended December 31,
2024
2023
2022
Current:
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$117,749
$ 71,741
$118,320
State
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20,970
13,802
25,743
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14,356
22,115
51,055
153,075
107,658
195,118
84
Year Ended December 31,
2024
2023
2022
Deferred:
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(46,526)
(26,504)
(43,475)
State
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(8,613)
(5,254)
(10,966)
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5,565)
(3,218)
(40,109)
(60,704)
(34,976)
(94,550)
Change in valuation allowance . . . . . . . . . . . . . . . . . . . . . . . .
89
498
(972)
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . .
$ 92,460
$ 73,180
$ 99,596
The Company files U.S. federal, U.S. state and foreign jurisdiction tax returns which are subject to
examination up to the expiration of the statute of limitations. The Company believes the tax positions taken
on its returns would be sustained upon an exam, or where a position is uncertain, adequate reserves have
been recorded. As of December 31, 2024, the Company is no longer subject to income tax examinations for
United States federal income taxes for tax years prior to 2021. Due to the carryforward of net operating
losses and research & development credits, the Company’s Wisconsin state income tax returns for tax years
2007 through 2023 remain open for potential examination. In addition, the Company is subject to audit by
various foreign taxing jurisdictions for tax years 2013 through 2023.
The Company is regularly under tax return examination by tax authorities in the various jurisdictions
in which we operate. The Company is actively managing the examinations and working to address any open
matters. While the Company does not believe any material taxes or penalties are due, there is a possibility
that the ultimate tax outcome of an examination may result in differences from what was recorded. Such
differences may affect the provision for income taxes in the period in which the determination is made and
could impact the Company’s financial results.
Significant components of deferred tax assets and liabilities are as follows:
December 31,
2024
2023
Deferred tax assets:
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 52,351
$ 48,758
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
43,261
36,927
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14,103
12,549
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16,959
14,143
Operating loss and credit carryforwards . . . . . . . . . . . . . . . . . . . . . . .
50,327
54,753
Bad debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,803
1,380
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13,031
8,722
Capitalized R&D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
98,323
65,523
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5,225)
(5,136)
Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
284,933
237,619
Deferred tax liabilities:
Goodwill and intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
234,271
253,342
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
49,935
45,964
Debt refinancing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
828
Interest swap and derivative instruments . . . . . . . . . . . . . . . . . . . . . .
6,496
9,521
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,284
2,444
Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
293,986
312,099
Net deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ (9,053)
$ (74,480)
85
As of December 31, 2024 and 2023, deferred tax assets of $24,132 and $15,532, and deferred tax
liabilities of $33,185 and $90,012, respectively, were reflected in the consolidated balance sheets.
The Company maintains a $5,225 valuation allowance against the deferred tax assets primarily related
to certain tax loss carryforwards which may not be realized. Realization of the deferred income tax asset
related to the tax loss carryforward is dependent upon generating sufficient taxable income in these
jurisdictions prior to their expiration. During 2024, the valuation allowance increased by $89 on our deferred
tax assets where we believe the tax asset may not be fully utilized.
At December 31, 2024, the Company had tax loss carryforwards of approximately $182,431, which
have varying expiration periods ranging from 2025 to indefinite. For carryforward amounts which the
Company believes the losses will expire prior to use, a valuation allowance has been established. For all other
carryforwards, the Company believes it will generate sufficient taxable income in these jurisdictions to
utilize its loss carryforwards.
At December 31, 2024, the Company had state manufacturing tax credit carryforwards of approximately
$27,510, which expire between 2028 and 2040. The Company believes it will generate sufficient taxable income
in these jurisdictions to fully utilize the credits prior to their expiration.
Changes in the Company’s gross liability for unrecognized tax benefits, excluding interest and penalties,
were as follows:
December 31,
2024
2023
Unrecognized tax benefit, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . $ 9,703 $ 8,895
Increase in unrecognized tax benefit for positions taken in prior period . . . . .
1,068
3,081
Increase in unrecognized tax benefit for positions taken in current period . . .
943
1,122
Statute of limitation expirations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(536) (3,395)
Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
Unrecognized tax benefit, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . $11,178 $ 9,703
The unrecognized tax benefit as of December 31, 2024 and 2023, if recognized, would favorably
impact the effective tax rate.
As of December 31, 2024 and 2023, total accrued interest of approximately $1,142 and $532, respectively,
and accrued penalties of approximately $954 and $1,275, respectively, associated with net unrecognized tax
benefits are included in the consolidated balance sheets. Interest and penalties are recorded as a component of
income tax expense.
The Company does not expect a significant change to the total amount of unrecognized tax benefits
during the fiscal year ending December 31, 2025.
A reconciliation of the U.S. federal statutory tax rate to the effective tax rate for the years ended
December 31, 2024, 2023 and 2022 is as follows:
Year Ended December 31,
2024
2023
2022
U.S. statutory rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21.0% 21.0% 21.0%
State taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.8
4.0
4.0
State tax rate differential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(0.2)
0.0
(0.3)
Research and development credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1.2)
(2.4)
(1.1)
State credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(0.5)
(0.9)
(1.5)
Share-based compensation benefit
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1.2)
(0.4)
(2.7)
Nondeductible U.S. compensation expense . . . . . . . . . . . . . . . . . . . . . . .
1.2
1.0
1.6
86
Year Ended December 31,
2024
2023
2022
Foreign tax deduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.0
0.0
(0.4)
Uncertain tax positions reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.6
0.9
0.0
Global intangible low tax income . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.4
1.7
0.2
Other
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1.3)
0.3
(1.2)
Effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22.6% 25.2% 19.6%
16.
Benefit Plans
Medical and Dental Plans
The Company maintains medical and dental benefit plans covering its full-time U.S. employees and
their dependents. These plans are partially or fully self-funded under which participant claims are obligations
of the plan. These plans are funded through employer and employee contributions at a level sufficient to
pay for the benefits provided by the plan. The Company’s contributions to the plans were $32,964, $26,090,
and $31,180 for the years ended December 31, 2024, 2023 and 2022, respectively.
Employees of the Company’s foreign subsidiaries participate in government sponsored medical benefit
plans and other local plans. In certain cases, the Company purchases supplemental medical coverage for
certain employees at these foreign locations. The expenses related to these plans are not material to the
Company’s consolidated financial statements.
Savings Plan
The Company maintains a defined-contribution 401(k) savings plan for eligible U.S. employees. Under
the plan, employees may defer receipt of a portion of their eligible compensation. The Company may
contribute a matching contribution of 50% of the first 8% of eligible compensation of employees that is
deferred. The Company may also contribute a non-elective contribution for eligible employees employed on
December 31, 2008, that were impacted by the freezing of the Company’s pension plans. The Company’s
matching contributions are subject to vesting. Forfeitures of unused company contributions may be applied
against plan expenses and future Company contributions. The Company recognized $7,779, $3,735, and
$4,141 of expense related to these plans for the years ended December 31, 2024, 2023 and 2022, respectively.
17.
Share Plans
The Company adopted an equity incentive plan (the 2010 Plan) on February 10, 2010, in connection
with its initial public offering. The 2010 Plan, as amended, allowed for the grant of up to 9.1 million share-
based awards to executives, directors, and employees. Awards available for grant under the 2010 Plan included
stock options, stock appreciation rights, restricted stock, other share-based awards and performance-based
compensation awards. New grants under the 2010 Plan ceased in June 2019. Total share-based compensation
expense related to the 2010 Plan, net of estimated forfeitures, was $0, $309, and $2,379 for the years ended
December 31, 2024, 2023 and 2022, respectively, which is recorded in operating expenses in the consolidated
statements of comprehensive income.
On June 13, 2019, the stockholders of Generac Holdings Inc. approved the Company’s 2019 Equity
Incentive Plan (the 2019 Plan). The 2019 Plan allows for the grant of up to 2.7 million share-based awards
to executives, directors, and employees. Awards available for grant under the 2019 Plan include stock options,
stock appreciation rights, restricted stock, other share-based awards and performance-based compensation
awards. On June 13, 2024, the stockholders of Generac Holdings Inc. approved an amendment to the 2019
Plan to increase the number of shares available for issuance by 3.9 million. Total share-based compensation
expense related to the 2019 Plan, net of estimated forfeitures, was $49,248, $35,183, and $27,102 for the years
ended December 31, 2024, 2023 and 2022, respectively, which is recorded in operating expenses in the
consolidated statements of comprehensive income.
Stock Options — Stock options granted in 2024 have an exercise price between $112.45 and $147.41
per share; stock options granted in 2023 have an exercise price between $110.86 and $119.57 per share; and
87
stock options granted in 2022 have an exercise price between $103.50 and $315.88 per share. Stock options
vest in equal installments over four years, subject to the grantee’s continued employment or service and expire
ten years after the date of grant.
Stock option exercises can be net-share settled such that the Company withholds shares with value
equivalent to the exercise price of the stock option awards plus the employees’ minimum statutory obligation
for the applicable income and other employment taxes. Total shares withheld were 9,701, 31,030, and
17,376 for the years ended December 31, 2024, 2023 and 2022, respectively, and were based on the value of
the stock on the exercise dates. The net-share settlement has the effect of share repurchases by the Company
as they reduce the number of shares that would have otherwise been issued.
Employees can also utilize a cashless for cash exercise of stock options, such that all exercised shares
will be sold in the market immediately. Cash equivalent to the exercise price of the awards plus the employees’
minimum statutory tax obligations is remitted to the Company, with the remaining cash being transferred
to the employee. Total net proceeds to the Company from the cashless for cash exercise of stock options were
$27,558, $7,815, and $13,786 for the years ended December 31, 2024, 2023 and 2022, respectively, and are
reflected as a financing activity in the consolidated statements of cash flows.
Total payments made by the Company to the taxing authorities for the employees’ tax obligations
related to stock option exercises were $13,672, $4,895, and $14,089 for the years ended December 31, 2024,
2023 and 2022, respectively, and are reflected as a financing activity in the consolidated statements of cash
flows.
The grant-date fair value of each option grant is estimated using the Black-Scholes-Merton option
pricing model. The fair value is then amortized on a straight-line basis over the requisite service period of
the awards, which is generally the vesting period. Use of a valuation model requires management to make
certain assumptions with respect to selected model inputs. Expected volatility is calculated based on an analysis
of historic volatility of the Company’s stock price. The average expected life is based on the contractual
term of the option using the simplified method. The risk-free interest rate is based on U.S. Treasury
zero-coupon issues with a remaining term equal to the expected life assumed at the date of grant. The
compensation expense recognized is net of estimated forfeitures. Forfeitures are estimated based on actual
share option forfeiture history and are trued up upon vesting based on actual forfeiture activity.
The weighted-average assumptions used in the Black-Scholes-Merton option pricing model for 2024,
2023 and 2022 are as follows:
Year Ended December 31,
2024
2023
2022
Weighted average grant date fair value per share . . . . . . . . . . . . . . .
$59.30
$57.73
$129.38
Assumptions:
Expected stock price volatility . . . . . . . . . . . . . . . . . . . . . . . . . . .
49%
45%
38%
Risk free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.19%
3.64%
1.54%
Expected annual dividend per share . . . . . . . . . . . . . . . . . . . . . . .
$
—
$
—
$
—
Expected life of options (years) . . . . . . . . . . . . . . . . . . . . . . . . . .
6.25
6.25
6.25
88
A summary of the Company’s stock option activity and related information for the years ended
December 31, 2024, 2023 and 2022 is as follows:
Number of
Options
Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Term (in years)
Aggregate
Intrinsic
Value
($ in thousands)
Outstanding as of December 31, 2021 . . . . . . . . . . .
1,342,131
64.29
5.5
$386,069
Granted
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
109,266
282.20
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(137,305)
36.91
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(45,688)
194.05
Outstanding as of December 31, 2022 . . . . . . . . . . .
1,268,404
81.35
4.9
$ 47,764
Granted
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
208,392
119.31
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(159,316)
42.46
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(33,144)
185.81
Outstanding as of December 31, 2023 . . . . . . . . . . .
1,284,336
89.64
5.0
$ 75,587
Granted
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
118,681
112.66
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(310,201)
57.20
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(63,265)
152.06
Outstanding as of December 31, 2024 . . . . . . . . . . .
1,029,551
96.10
4.9
$ 78,310
Exercisable as of December 31, 2024 . . . . . . . . . . . .
753,487
77.67
3.6
$ 69,273
As of December 31, 2024, there was $13,405 of total unrecognized compensation cost, net of expected
forfeitures, related to unvested options. The cost is expected to be recognized over the remaining service
period, having a weighted-average period of 2.3 years. Total share-based compensation cost related to stock
options for the years ended December 31, 2024, 2023 and 2022 was $8,122, $8,229, and $6,911, respectively,
which is recorded in operating expenses in the consolidated statements of comprehensive income.
Restricted Stock — Restricted stock awards vest in equal installments over three years, subject to the
grantee’s continued employment or service. Certain restricted stock awards also include performance shares,
whereby the number of performance shares that can be earned are contingent upon Company performance
measures over a three-year period. Performance measures are based on a weighting of a number of financial
metrics, from which grantees may earn from 0% to 200% of their target performance share award. The
performance period for the 2022 awards covers the years 2022 through 2024. The performance period for
the 2023 awards covers the years 2023 through 2025. The performance period for the 2024 awards covers
the years 2024 through 2026. The Company estimates the number of performance shares that will vest based
on projected financial performance. The fair value of restricted awards is determined based on the market
value of the Company’s stock on the grant date. The fair market value of the restricted awards at the time of
the grant is amortized to expense over the period of vesting. The compensation expense recognized for
restricted share awards is net of estimated forfeitures and is trued up upon vesting based on actual forfeiture
activity.
All restricted stock vesting is net-share settled such that, upon vesting, the Company withholds shares
with value equivalent to the employees’ minimum statutory tax obligation, and then pays the cash to the
taxing authorities on behalf of the employees. In effect, the Company repurchases these shares and classifies
them as treasury stock. Total shares withheld were 78,465, 50,577, and 92,008 for the years ended
December 31, 2024, 2023 and 2022, respectively, and were based on the value of the stock on the vesting
dates. Total payments made by the Company to the taxing authorities for the employees’ tax obligations
related to restricted stock vesting were $11,097, $6,002, and $26,834 for the years ended December 31, 2024,
2023 and 2022, respectively, and are reflected as a financing activity within the consolidated statements of
cash flows.
89
A summary of the Company’s restricted stock activity for the years ended December 31, 2024, 2023
and 2022 is as follows:
Shares
Weighted-
Average
Grant-Date
Fair Value
Non-vested as of December 31, 2021
. . . . . . . . . . . . . . . . . . . . . . . . . .
365,965
$124.25
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
287,821
214.58
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(234,284)
83.52
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(41,204)
263.47
Non-vested as of December 31, 2022
. . . . . . . . . . . . . . . . . . . . . . . . . .
378,298
203.04
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
425,099
$117.62
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(133,222)
175.94
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(44,789)
213.80
Non-vested as of December 31, 2023
. . . . . . . . . . . . . . . . . . . . . . . . . .
625,386
153.01
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
503,937
$120.77
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(206,435)
177.28
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(115,135)
130.89
Non-vested as of December 31, 2024
. . . . . . . . . . . . . . . . . . . . . . . . . .
807,753
127.07
As of December 31, 2024, there was $59,177 of unrecognized compensation cost, net of expected
forfeitures, related to non-vested restricted stock awards. That cost is expected to be recognized over the
remaining service period, having a weighted-average period of 1.9 years. Total share-based compensation
cost related to the restricted stock for the years ended December 31, 2024, 2023 and 2022, inclusive of
performance shares, was $41,126, $27,263, and $22,570, respectively, which is recorded in operating expenses
in the consolidated statements of comprehensive income.
During 2024, 2023 and 2022, 14,814, 16,174, and 8,572 shares of stock, respectively, were granted to
certain members of the Company’s Board as a component of their compensation for their service on the
Board, all of which were fully vested at time of grant. A non-employee director can elect to receive his or her
director fees in the form of deferred stock units, which voluntarily defers the issuance of the related shares
granted until the director separates from the Company, or a triggering event occurs. 8,484, 8,832, and 5,008 of
deferred stock units are included in the shares of stock granted to certain members of the Company’s
Board for the years 2024, 2023, and 2022, respectively. Total share-based compensation cost for shares of
stock granted to the Company’s Board in 2024, 2023 and 2022 was $1,992, $1,846, and $1,886, respectively,
which is recorded in operating expenses in the consolidated statements of comprehensive income.
18. Commitments and Contingencies
The Company has an arrangement with a finance company to provide floor plan financing for certain
dealers. The Company receives payment from the finance company after shipment of product to the dealer.
The Company participates in the cost of dealer financing up to certain limits and has agreed to repurchase
products repossessed by the finance company, but does not indemnify the finance company for any credit
losses they incur. The amount financed by dealers which remained outstanding under this arrangement as
of December 31, 2024 and 2023 was approximately $165,432 and $158,028, respectively.
On August 1, 2022, Power Home Solar, LLC d/b/a Pink Energy (PHS) filed a lawsuit in the Western
District of Virginia against Generac Power Systems, Inc., a wholly-owned subsidiary of the Company
(Generac Power). The complaint alleges breaches of warranty, product liability, and other various causes of
action against Generac Power relating to the sale and performance of certain clean energy equipment and
seeks to recover damages, including consequential damages, that PHS allegedly incurred. The Company
disputes the allegations in the complaint, including that PHS can seek consequential damages or amounts
greater than the $25,000 liability cap set forth in the agreement between the parties. Generac Power moved
to dismiss the complaint and compel arbitration consistent with the parties’ agreement. PHS later filed a
90
Chapter 7 bankruptcy petition in the Western District of North Carolina that identified Generac Power as
one of its outstanding creditors. The parties agreed to toll PHS’s deadline to respond to the motion to dismiss
and all other pretrial deadlines to allow the bankruptcy trustee to evaluate the complaint. The Trustee has
not yet taken further action in this lawsuit. Generac Power intends to vigorously defend against the claims in
the complaint, in whichever forum they may proceed.
On October 28, 2022, Daniel Haak filed a putative consumer class action lawsuit against Generac
Power in the Middle District of Florida. The complaint alleges breaches of warranty, tort-based, and unjust
enrichment claims against Generac Power relating to the sale and performance of certain clean energy
products, and seeks to recover damages, including consequential damages, that the plaintiff and putative
class allegedly incurred. Additional putative class actions were filed by consumers raising similar claims and
allegations in other district court cases. These putative class actions have been consolidated into a
Multidistrict Litigation, In re: Generac Solar Power Systems Marketing, Sales Practices and Products
Liability Litigation currently pending in the Eastern District of Wisconsin, Case No. 23-md-3078. Generac
Power and the Company filed their answer to the consolidated master complaint after the court denied the
motion to dismiss on May 24, 2024. Generac Power and the Company intend to vigorously defend against
the consolidated master complaint.
On December 1, 2022, Oakland County Voluntary Employees’ Beneficiary Association and Oakland
County Employees’ Retirement System filed a putative securities class action lawsuit against the Company
and certain of its officers in the Eastern District of Wisconsin. The court subsequently consolidated a later
filed action and appointed a lead plaintiff. The lead plaintiff filed a consolidated complaint alleging
violation of federal securities law related to disclosures of certain matters (the Oakland County Lawsuit).
On February 7, 2025, the court granted the Company’s motion to dismiss and found that plaintiffs failed to
adequately plead a securities fraud claim. The court gave plaintiffs until March 10, 2025, to file an amended
complaint if they want to continue the lawsuit.
On February 3, 2023, a purported Company shareholder filed a shareholder derivative action against
certain of the Company’s officers and directors in the United States District Court for the Eastern District
of Wisconsin. The complaint seeks unspecified damages on behalf of the Company and certain other relief,
such as certain reforms to corporate governance practices. The complaint (in which the Company is
named as a nominal defendant) generally alleges, among other things, breaches of fiduciary duties in
connection with the oversight of the Company’s public statements and legal compliance, and that the
Company was damaged as a result of the breaches of fiduciary duties, and the defendants were unjustly
enriched. The complaint also alleges, among other things, violations of Sections 14(a), 10(b) and 20(a) of the
Securities Exchange Act of 1934, abuse of control, gross mismanagement, and waste of corporate assets.
The Company has received several additional derivative actions filed in both state and federal courts raising
similar claims and allegations, including issues raised in the Oakland County Lawsuit. The Company
disputes the allegations in the shareholder derivative actions and intends to vigorously defend against the
claims in the complaints.
On October 28, 2022, Generac Power received a grand jury subpoena from the U.S. Attorney for the
Eastern District of Michigan, as a result of which the Company became aware of an enforcement
investigation by the U.S. DOJ. The subpoena requests similar documents and information provided by the
Company to the U.S. EPA and the CARB in response to civil document requests related to the Company’s
compliance with emissions regulations for approximately 1,850 (not in thousands) portable generators
produced by the Company in 2019 and 2020 and sold in 2020. On October 2, 2024, the Company received
additional information from the EPA that could increase the number of portable generators under review by
the EPA by approximately 4,850 (not in thousands) if certain emissions certifications for 2020 are voided.
The Company is cooperating with the DOJ, EPA and CARB regarding these topics and related requests.
On November 30, 2022, the CPSC notified the Company of its intention to recommend the imposition
of a civil penalty for failing to timely submit a report to the CPSC in relation to certain portable generators
that were subject to a voluntary recall previously announced on July 29, 2021. On May 3, 2023, the
parties entered into a mutual settlement agreement. The agreement does not constitute an admission by
Generac or a determination by the CPSC that Generac violated the CPSA. The terms of the settlement
agreement require the Company to (i) abide by certain customary agency requirements regarding the ongoing
commitment to the Company’s internal CPSA compliance practices and program, and (ii) pay a civil fine
91
of $15,800. On July 21, 2023, Generac Power received a grand jury subpoena from the U.S. Attorney for the
Eastern District of Wisconsin, as a result of which the Company became aware of a continuing inquiry by
the DOJ related to its statutory obligations under the CPSA in connection with this matter. Additionally, on
October 23, 2023, the CPSC notified the Company that it is further investigating whether the Company
complied with the reporting requirements to the CPSC in relation to certain portable generators that were
subject to a voluntary recall previously announced on September 14, 2023. The Company is cooperating fully
with both the CPSC and DOJ investigations and, at this time, is unable to predict the eventual scope,
duration or final outcome of such investigations.
In 2019, EcoFactor, Inc. started a litigation campaign against smart thermostat manufacturers, including
ecobee, Inc., which was acquired by the Company in 2021. EcoFactor accused ecobee of infringing its patents
in three lawsuits filed in the United States District Court for the Western District of Texas and one lawsuit
in the United States District Court for the District of Delaware. On June 23, 2023, a jury issued a verdict in a
consolidated action in the Western District of Texas (Case Nos. 21-cv-00428-ADA and 20-cv-00078-ADA)
finding that ecobee infringed one of the two patents at issue and awarded a lump-sum payment of $5,400 for
past and future damages. On December 27, 2023, the parties reached a global settlement at an incremental cost
of $4,600 to resolve all remaining disputes between the parties, including the two remaining lawsuits. In 2023,
the Company recorded a reserve of $10,000 related to this matter.
On March 8, 2022, Ollnova Technologies Limited, a non-practicing entity, filed a patent infringement
lawsuit against ecobee Technologies, ULC. (ecobee) in the United States District Court for the Eastern
District of Texas (Case No. 22-cv-00072-JRG). Ollnova claimed that ecobee infringes on four of its patents.
Following an October 5, 2023, jury verdict finding one of Ollnova’s patents invalid and that ecobee
infringed at least one of the claims of the asserted patents, on March 1, 2024, the trial court entered judgment
against ecobee for $11,500, as well as an award of prejudgment and post-judgment interest. In 2023, the
Company recorded a reserve of $12,669 related to this matter. In the first quarter of 2024, the Company
recorded an additional reserve of $1,826 for estimated prejudgment and post-judgement interest. ecobee has
appealed the trial court’s judgment to the Court of Appeals for the Federal Circuit and that appeal is
currently pending.
On June 9, 2023, Spartronics Vietnam, Inc., a contract manufacturer of Generac Power’s clean energy
products, filed multiple lawsuits against Generac Power and sub-suppliers accusing Generac Power of fraud,
breaching its supply agreement with Spartronics, tortiously interfering with Spartronics’ relationships with
its sub-suppliers, and requesting a determination of rights under the parties’ agreements in state and federal
court. Spartronics subsequently filed additional third-party complaints against Generac Power raising
similar claims and allegations. After a court granted Generac Power’s motion to compel arbitration,
Spartronics filed a demand for arbitration of its claims. Generac Power denies the allegations in the complaints,
including that Generac Power is responsible for Spartronics’ purchasing practices, and is pursuing a
counterclaim in connection with the arbitration.
On November 21, 2023, Christopher Walling filed a putative securities class action lawsuit against the
Company and certain of its officers in the Western District of Wisconsin and was later appointed lead
plaintiff. The complaint asserts claims for alleged violation of federal securities law related to statements
concerning the Company’s financial outlook and the impact of macroeconomic trends on the demand for
its products. The plaintiff seeks to represent a class of individuals who purchased or otherwise acquired
common stock between May 3, 2023, and August 3, 2023, and seeks unspecified compensatory damages and
other relief on behalf of a purported class of purchasers of the Company’s stock (the Walling Lawsuit).
The Company moved to dismiss the amended complaint on June 21, 2024, and intends to vigorously defend
against the claims in the amended complaint.
On February 14, 2024, a purported Company shareholder filed a derivative action against certain of
the Company’s officers and directors in the United States District Court for the Eastern District of Wisconsin.
The complaint (in which the Company is named as a nominal defendant) generally alleges, among other
things, breaches of fiduciary duties in connection with the oversight of the Company’s public statements and
legal compliance, including as to the claims raised in the Walling Lawsuit. The complaint seeks unspecified
damages on behalf of the Company and certain other relief, including certain corporate governance reforms.
The Company disputes the allegations in the shareholder derivative action and intends to vigorously
defend against the claims in the complaint.
92
On October 9, 2024, Champion Power Equipment, Inc. (Champion) filed a patent infringement lawsuit
against Generac Power in the United States District Court for the Eastern District of Wisconsin (Case
No. 24-cv-01281-LA). Champion claims that certain Generac and Powermate branded multi-fuel portable
generators infringe on Champion’s portfolio of dual and multi-fuel patents. Generac Power denies the
allegations and intends to vigorously defend the matter.
On October 18, 2024, two individuals filed a putative consumer class action lawsuit against Generac
Power and the Company in the Middle District of Florida (Case No. 24-cv-02412). The Amended Complaint,
which includes additional plaintiffs, alleges certain defects for home standby generators manufactured or
sold to consumers from 2020-2024. Plaintiffs assert breaches of warranty, tort-based, and statutory claims
relating to the sale and performance of home standby generators. The Company disputes the allegations and
intends to vigorously defend against the claims in the complaint, including that the case should not
proceed as a class action.
It is presently unlikely that any legal, regulatory or other proceedings pending against or involving the
Company will have a material adverse effect on the Company’s financial condition, results of operations or
cash flows. However, in many of these matters, it is inherently difficult to determine whether a loss is probable
or to estimate the size or range of the possible loss given the variety and potential outcomes of actual and
potential claims, the uncertainty of future rulings, the behavior or incentives of adverse parties, and other
factors outside the control of the Company. Accordingly, the Company’s loss reserves may change from time
to time, and actual losses could exceed the amounts reserved by an amount that could be material to the
Company’s consolidated financial position, results of operations or cash flows in any particular reporting
period.
19.
Valuation and Qualifying Accounts
For the years ended December 31, 2024, 2023 and 2022:
Balance at
Beginning
of Year
Additions
Charged to
Earnings
Charges to
Reserve,
Net(1)
Reserves
Established
for
Acquisitions
Balance at
End of Year
Year ended December 31, 2024
Allowance for credit losses . . . . . . .
$33,925
$ 4,524
$(3,509)
$
525
$35,465
Reserves for inventory . . . . . . . . . .
39,027
10,738
(2,924)
1,332
48,173
Valuation of deferred tax assets . . . .
5,136
447
(358)
—
5,225
Year ended December 31, 2023
Allowance for credit losses . . . . . . .
$27,664
$ 7,443
$(1,206)
$
24
$33,925
Reserves for inventory . . . . . . . . . .
39,714
4,621
(5,308)
—
39,027
Valuation of deferred tax assets . . . .
4,638
516
(18)
—
5,136
Year ended December 31, 2022
Allowance for credit losses . . . . . . .
$12,025
$17,966
$(2,825)
$
498
$27,664
Reserves for inventory . . . . . . . . . .
33,537
9,656
(4,737)
1,258
39,714
Valuation of deferred tax assets . . . .
7,874
649
(1,501)
(2,384)
4,638
(1)
Deductions from the allowance for credit losses equal accounts receivable written off against the
allowance, less recoveries, as well as foreign currency translation adjustments. Deductions from the
reserves for inventory excess and obsolete items equal inventory written off against the reserve as items
were disposed of, as well as foreign currency translation adjustments.
93
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
There were no changes in, or disagreements with, accountants reportable herein.
Item 9A.
Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that
information required to be disclosed by us in reports we file or submit under the Securities Exchange Act of
1934 (Exchange Act), is recorded, processed, summarized and reported within the time periods specified
in the Securities and Exchange Commission rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that such information is accumulated and
communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as
appropriate, to allow for timely decisions regarding required disclosure.
Our management, with the participation of our Chief Executive Officer and our Chief Financial
Officer, has conducted an evaluation of the design and operation of our disclosure controls and procedures
as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act as of the end of the period covered by
this report on Form 10-K. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer
concluded that our disclosure controls and procedures were effective in providing reasonable assurance
that the information required to be disclosed in this report on Form 10-K has been recorded, processed,
summarized and reported as of the end of the period covered by this report on Form 10-K.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over
financial reporting, as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control
over financial reporting is designed under the supervision of our Chief Executive Officer and Chief
Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of the consolidated financial statements in accordance with U.S. GAAP.
Internal control over financial reporting includes those policies and procedures that (i) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded
as necessary to permit preparation of the financial statements in accordance with U.S. GAAP, and that receipts
and expenditures of the Company are being made only in accordance with authorizations of management
and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect
on the Company’s financial statements.
There are inherent limitations to the effectiveness of any internal control over financial reporting,
including the possibility of human error or the circumvention or overriding of the controls. Accordingly,
even an effective internal control over financial reporting can provide only reasonable assurance of achieving
its objective. Because of its inherent limitations, internal control over financial reporting may not prevent
or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate, because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
Under the supervision and with the participation of our Chief Executive Officer and Chief Financial
Officer, our management conducted an assessment of the effectiveness of internal control over financial
reporting as of December 31, 2024 based on the criteria established in the 2013 Internal Control — Integrated
Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Based on this assessment, our management has concluded that our internal control over financial reporting
was effective as of December 31, 2024.
Deloitte & Touche LLP (PCAOB ID No. 34), the Company’s independent registered public accounting
firm, issued an attestation report on the effectiveness of the Company’s internal control over financial
reporting as of December 31, 2024, which is included herein.
94
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting that occurred during the
three months ended December 31, 2024 that have materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.
Item 9B.
Other Information
Adoption: On November 19, 2024, Aaron Jagdfeld, Chief Executive Officer and director, adopted a
Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for
(i) the sale of up to 46,303 shares of the Company’s common stock and (ii) the exercise of stock options to
acquire 13,697 shares and sale of the acquired shares until February 27, 2026.
Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
None
PART III
Item 10.
Directors, Executive Officers and Corporate Governance
The information required by Item 10 not already provided herein under “Item 1 — Business —
Information About Our Executive Officers”, will be included in our 2025 Proxy Statement and is
incorporated herein by reference.
Item 11.
Executive Compensation
The information required by this item will be included in our 2025 Proxy Statement and is incorporated
herein by reference.
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
The information required by this item, including under the heading “Securities Authorized for Issuance
Under Equity Compensation Plans,” will be included in our 2025 Proxy Statement and is incorporated herein
by reference.
Item 13.
Certain Relationships and Related Transactions, and Director Independence
The information required by this item will be included in our 2025 Proxy Statement and is incorporated
herein by reference.
Item 14.
Principal Accountant Fees and Services
The information required by this item will be included in our 2025 Proxy Statement and is incorporated
herein by reference.
95
PART IV
Item 15.
Exhibits and Financial Statement Schedules
(a)(1)
Financial Statements
Included in Part II of this report:
Page
Reports of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . .
53
Consolidated balance sheets as of December 31, 2024 and 2023 . . . . . . . . . . . . . . . . . . . . . . . . .
56
Consolidated statements of comprehensive income for years ended December 31, 2024, 2023 and
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
57
Consolidated statements of stockholders’ equity for years ended December 31, 2024, 2023 and
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
58
Consolidated statements of cash flows for the years ended December 31, 2024, 2023 and 2022 . . . .
60
Notes to consolidated financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
61
(a)(2)
Financial Statement Schedules
All financial statement schedules have been omitted, since the required information is not applicable or
is not present in amounts sufficient to require submission of the schedule, or because the information required
is included in the consolidated financial statements and notes thereto.
(a)(3)
Exhibits
The below exhibits index is the list of the exhibits being filed or furnished with or incorporated by
reference into this Annual Report on Form 10-K:
Exhibits
Number
Description
2.1
Arrangement Agreement dated as of November 1, 2021 by and among 13462234 Canada Inc.,
Generac Power Systems, Inc., ecobee Inc., and Shareholder Representative Services LLC
(incorporated by reference to Exhibit 2.1 of the Company’s Current Report on Form 8-K filed
with the SEC on November 2, 2021).
2.2
Amendment No. 1, dated as of May 31, 2022, to Arrangement Agreement dated as of
November 1, 2021, by and among 13462234 Canada Inc., Generac Power Systems, Inc., ecobee
Inc., and Shareholder Representative Services LLC (incorporated by reference to Exhibit 10.2
of the Quarterly Report on Form 10-Q filed with the SEC on August 8, 2022).
2.3
Amendment, dated as of December 29, 2022, to Arrangement Agreement dated as of
November 1, 2021 by and among 13462234 Canada Inc., Generac Power Systems, Inc., ecobee
Inc., and Shareholder Representative Services LLC (incorporated by reference to Exhibit 2.3 of
the Annual Report on Form 10-K filed with the SEC on February 22, 2023).
3.1
Third Amended and Restated Certificate of Incorporation of Generac Holdings Inc.
(incorporated by reference to Exhibit 3.1 of the Company’s Annual Report on Form 10-K for
the fiscal year ended December 31, 2009).
3.2
Amended and Restated Bylaws of Generac Holdings Inc. (incorporated by reference to
Exhibit 3.2 of the Company’s Current Report on Form 8-K filed with the SEC on March 10,
2023).
4.1
Form of Common Stock Certificate (incorporated by reference to Exhibit 4.1 of the
Registration Statement on Form S-1 filed with the SEC on January 25, 2010).
4.2
Description of Securities (incorporated by reference to Exhibit 4.2 of the Annual Report on
Form 10-K filed with the SEC on February 25, 2020).
96
Exhibits
Number
Description
10.1
Credit Agreement, Dated as of February 9, 2012, As Amended and Restated as of May 30,
2012, As Further Amended and Restated as of May 31, 2013, among Generac Power Systems,
Inc., Generac Acquisition Corp., the lenders party thereto, JPMorgan Chase Bank, N.A., as
Administrative Agent and Bank of America, N.A. and Goldman Sachs Bank USA, as
syndication agent (incorporated by reference to Exhibit 10.2 to the Company’s Current Report
on Form 8-K filed with the SEC on June 4, 2013).
10.2
First Amendment dated as of May 18, 2015, to Credit Agreement, dated as of February 9,
2012, as amended and restated as of May 30, 2012, as further amended and restated as of
May 31, 2013, among Generac Power Systems, Inc., Generac Acquisition Corp., the lenders
party thereto, JPMorgan Chase Bank, N.A. as administrative agent and Bank of America,
N.A. and Goldman Sachs Bank USA, as syndication agents and Deutsche Bank Securities
Inc., Morgan Stanley Senior Funding, Inc. and Wells Fargo Bank, N.A. as document agents
(incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q
filed with the SEC on August 7, 2015).
10.3
Replacement Term Loan Amendment dated as of November 2, 2016, among Generac Power
Systems, Inc., Generac Acquisition Corp., the lenders party thereto, JPMorgan Chase Bank,
N.A., as Administrative Agent, and the other agents named therein (incorporated by reference
to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on
November 3, 2016).
10.4
2017 Replacement Term Loan Amendment dated as of May 11, 2017, among Generac Power
Systems, Inc., Generac Acquisition Corp., the lenders party thereto, JPMorgan Chase Bank,
N.A., as Administrative Agent, and the other agents named therein (incorporated by reference
to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 15,
2017).
10.5
2017-2 Replacement Term Loan Amendment dated as of December 8, 2017, among Generac
Power Systems, Inc., Generac Acquisition Corp., the lenders party thereto, JPMorgan Chase
Bank, N.A., as Administrative Agent, and the other agents named therein (incorporated by
reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on
December 11, 2017).
10.6
2018 Replacement Term Loan Amendment, dated as of June 8, 2018, among Generac Power
Systems, Inc., Generac Acquisition Corp., the lenders party thereto, JPMorgan Chase Bank,
N.A., as Administrative Agent, and the other agents named therein (incorporated by reference
to Exhibit 10.1 of the Current Report on Form 8-K filed with the SEC on June 14, 2018).
10.7
2019 Replacement Term Loan Amendment, dated as of December 13, 2019, among Generac
Power Systems, Inc., Generac Acquisition Corp., the lenders party thereto, JPMorgan Chase
Bank, N.A., as Administrative Agent, and the other agents named therein (incorporated by
reference to Exhibit 10.1 of the Current Report on Form 8-K filed with the SEC on
December 16, 2019).
10.8
Second Amendment, dated as of May 27, 2021, amending that certain Credit Agreement,
dated as of February 9, 2012, as amended and restated as of May 30, 2012, as further amended
and restated as of May 31, 2013, as amended by the First Amendment, dated as of May 18,
2015, as further amended by the Replacement Term Loan Amendment, dated as of
November 2, 2016, as further amended by the 2017 Replacement Term Loan Amendment,
dated as of May 11, 2017, as further amended by the 2017-2 Replacement Term Loan
Amendment, dated December 8, 2017, as further amended by the 2018 Replacement Term
Loan Amendment, dated June 8, 2018, and as further amended by the 2019 Replacement Term
Loan Amendment, dated December 13, 2019, among Generac Power Systems, Inc., Generac
Acquisition Corp., the other Loan Parties (as defined therein) party thereto, the lenders party
thereto, JPMorgan Chase Bank, N.A., as Administrative Agent and the other agents named
therein (incorporated by reference to Exhibit 10.2 of the Current Report on Form 8-K filed
with the SEC on May 28, 2021).
97
Exhibits
Number
Description
10.9
Third Amendment, dated as of June 29, 2022, amending and restating that certain Credit
Agreement, dated as of February 9, 2012, as amended and restated as of May 30, 2012, as
further amended and restated as of May 31, 2013, as amended by the First Amendment, dated
as of May 18, 2015, as further amended by the Replacement Term Loan Amendment, dated as
of November 2, 2016, as further amended by the 2017 Replacement Term Loan Amendment,
dated as of May 11, 2017, as further amended by the 2017-2 Replacement Term Loan
Amendment, dated December 8, 2017, as further amended by the 2018 Replacement Term
Loan Amendment, dated June 8, 2018, as further amended by the 2019 Replacement Term
Loan Amendment, dated December 13, 2019 and as further amended by the Second
Amendment, dated May 27, 2021, among Generac Power Systems, Inc., Generac Acquisition
Corp., the other Loan Parties (as defined therein) party thereto, the lenders party thereto,
JPMorgan Chase Bank, N.A., as Administrative Agent and the other agents named therein
(incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed with the
SEC on June 30, 2022.
10.10
First Amendment, dated as of January 31, 2023, to that certain Credit Agreement, dated as of
February 9, 2012, as amended and restated as of May 30, 2012, as further amended and
restated as of May 31, 2013, as amended by the First Amendment, dated as of May 18, 2015,
as further amended by the Replacement Term Loan Amendment, dated as of November 2,
2016, as further amended by the 2017 Replacement Term Loan Amendment, dated as of
May 11, 2017, as further amended by the 2017-2 Replacement Term Loan Amendment, dated
December 8, 2017, as further amended by the 2018 Replacement Term Loan Amendment,
dated June 8, 2018, as further amended by the 2019 Replacement Term Loan Amendment,
dated December 13, 2019, as further amended by the Second Amendment, dated May 27, 2021,
and as further amended and restated by the Third Amendment, dated June 29, 2022, among
Generac Power Systems, Inc., Generac Acquisition Corp., the other Loan Parties (as defined
therein) party thereto, the lenders party thereto, JPMorgan Chase Bank, N.A., as
Administrative Agent and the other agents named therein (incorporated by reference to
Exhibit 10.10 of the Annual Report on Form 10-K filed with the SEC on February 22, 2023).
10.11
Restatement Agreement, dated as of May 31, 2013, to that certain Credit Agreement, dated as
of February 9, 2012, as amended and restated as of May 30, 2012, among Generac Power
Systems, Inc., Generac Acquisition Corp., the lenders party thereto, JPMorgan Chase Bank,
N.A., as Administrative Agent, and Bank of America, N.A. and Goldman Sachs Bank USA,
as syndication agents (incorporated by reference to Exhibit 10.1 to the Company’s Current
Report on Form 8-K filed with the SEC on June 4, 2013).
10.12
2024 Replacement Term Loan Amendment, dated as of July 3, 2024, to that certain Credit
Agreement, dated as of February 9, 2012, as amended and restated as of May 30, 2012, as
further amended and restated as of May 31, 2013, as amended by the First Amendment dated
as of May 18, 2015, as amended by the Replacement Term Loan Amendment dated as of
November 2, 2016, as amended by the 2017 Replacement Term Loan Amendment dated as of
May 11, 2017, as amended by the 2017-2 Replacement Term Loan Amendment dated as of
December 8, 2017, as amended by the 2018 Replacement Term Loan Amendment dated as of
June 8, 2018, as amended by the 2019 Replacement Term Loan Amendment dated as of
December 13, 2019, as amended by the Second Amendment dated as of May 27, 2021, as
amended and restated by the Third Amendment dated as of June 29, 2022 and as amended by
the First Amendment dated as of January 31, 2023, among Generac Acquisition Corp.,
Generac Power Systems, Inc., several lenders, and JPMorgan Chase Bank, N.A., as
administrative agent (incorporated by reference to Exhibit 10.1 to the Company’s Current
Report on Form 8-K filed with the SEC on July 5, 2024).
98
Exhibits
Number
Description
10.13
Guarantee and Collateral Agreement, dated as of February 9, 2012, as amended and restated
as of May 30, 2012, among Generac Holdings Inc., Generac Acquisition Corp., Generac Power
Systems, Inc., certain subsidiaries of Generac Power Systems, Inc. and JPMorgan Chase Bank,
N.A., as Administrative Agent (incorporated by reference to Exhibit 10.2 of the Company’s
Current Report on Form 8-K filed with the SEC on May 31, 2012).
10.14
First Amendment to Guarantee and Collateral Agreement dated as of May 31, 2013, among
Generac Holdings Inc., Generac Acquisition Corp., Generac Power Systems, Inc., certain
subsidiaries of Generac Power Systems, Inc. and JPMorgan Chase Bank, N.A., as
Administrative Agent (incorporated by reference to Exhibit 10.3 to the Company’s Current
Report on Form 8-K filed with the SEC on June 4, 2013).
10.15
Credit Agreement, dated as of May 30, 2012, among Generac Power Systems, Inc., its
Domestic Subsidiaries listed as Borrowers on the signature pages thereto, Generac Acquisition
Corp., the lenders party thereto, Bank of America, N.A. as Administrative Agent, JPMorgan
Chase Bank, N.A. and Goldman Sachs Bank USA, as syndication agents, and Wells Fargo
Bank, National Association, as Documentation Agent (incorporated by reference to
Exhibit 10.3 of the Company’s Current Report on Form 8-K filed with the SEC on May 31,
2012).
10.16
Amendment No. 1 dated as of May 31, 2013, among Generac Power Systems, Inc., its
Domestic Subsidiaries listed as Borrowers on the signature pages thereto, Generac Acquisition
Corp., the lenders party thereto, Bank of America, N.A. as Administrative Agent, JPMorgan
Chase Bank, N.A. and Goldman Sachs Bank USA, as syndication agents, and Wells Fargo
Bank, National Association, as Documentation Agent (incorporated by reference to
Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the SEC on June 4,
2013).
10.17
Amendment No. 2 dated as of May 29, 2015, among Generac Power Systems, Inc., its
Domestic Subsidiaries listed as Borrowers on the signature pages thereto, Generac Acquisition
Corp., the lenders party thereto, Bank of America, N.A. as Administrative Agent, and the
other agents named therein (incorporated by reference to Exhibit 10.1 of the Company’s
Current Report on Form 8-K filed with the SEC on June 1, 2015).
10.18
Second Amended and Restated Credit Agreement, dated as of June 12, 2018, among Generac
Power Systems, Inc., its Subsidiaries listed as Borrowers on the signature pages thereto,
Generac Acquisition Corp., the lenders party thereto, Bank of America, N.A. as
Administrative Agent, JPMorgan Chase Bank, N.A., as Syndication Agent, and Wells Fargo
Bank, National Association, as Documentation Agent (incorporated by reference to
Exhibit 10.2 of the Current Report on Form 8-K filed with the SEC on June 14, 2018).
10.19
Third Amended and Restated Credit Agreement, dated as of May 27, 2021, among Generac
Power Systems, Inc., its Subsidiaries listed as Borrowers on the signature pages thereto,
Generac Acquisition Corp., the lenders party thereto, Bank of America, N.A. as
Administrative Agent, JPMorgan Chase Bank, N.A. as Syndication Agent, and Wells Fargo
Bank, National Association as Documentation Agent (incorporated by reference to
Exhibit 10.1 of the Current Report on Form 8-K filed with the SEC on May 28, 2021).
10.20
Guarantee and Collateral Agreement, dated as of May 30, 2012, among Generac Holdings
Inc., Generac Acquisition Corp., Generac Power Systems, Inc., certain subsidiaries of Generac
Power Systems, Inc. and Bank of America, N.A., as Administrative Agent (incorporated by
reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K filed with the SEC on
May 31, 2012).
99
Exhibits
Number
Description
10.21
First Amendment to Guarantee and Collateral Agreement dated as of May 31, 2013, among
Generac Holdings Inc., Generac Acquisition Corp., Generac Power Systems, Inc., certain
subsidiaries of Generac Power Systems, Inc. and Bank of America, N.A., as Administrative
Agent (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on
Form 8-K filed with the SEC on June 4, 2013).
10.22+
Generac Holdings Inc. Amended and Restated 2010 Equity Incentive Plan (incorporated by
reference to Appendix A to the Definitive Proxy Statement on Schedule 14A of the Company
filed with the SEC on April 27, 2012).
10.23+
Generac Holdings Inc. Annual Performance Bonus Plan (incorporated by reference to
Exhibit 10.63 of the Registration Statement on Form S-1 filed with the SEC on January 25,
2010).
10.24+
Amended and Restated Employment Agreement dated November 5, 2018, between Generac
and Aaron Jagdfeld (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly
Report on Form 10-Q filed with the SEC on November 6, 2018).
10.25
Form of Confidentiality, Non-Competition and Intellectual Property Agreement (incorporated
by reference to Exhibit 10.40 of the Registration Statement on Form S-1 filed with the SEC on
November 24, 2009).
10.26+
Form of Nonqualified Stock Option Award Agreement (incorporated by reference to
Exhibit 10.45 of the Registration Statement on Form S-1 filed with the SEC on January 25,
2010).
10.27+
Amended Form of Restricted Stock Award Agreement pursuant to the 2010 Equity Incentive
Plan (incorporated by reference to Exhibit 10.3 of the Quarterly Report on Form 10-Q filed
with the SEC on May 8, 2012).
10.28+
Amended Form of Nonqualified Stock Option Award Agreement pursuant to the 2010 Equity
Incentive Plan (incorporated by reference to Exhibit 10.4 of the Quarterly Report on
Form 10-Q filed with the SEC on May 8, 2012).
10.29+
Amended Form of Nonqualified Stock Option Award Agreement pursuant to the 2010 Equity
Incentive Plan (incorporated by reference to Exhibit 10.24 of the Annual Report on Form 10-K
filed with the SEC on February 26, 2019).
10.30+
Amended Form of Restricted Stock Award Agreement pursuant to the 2010 Equity Incentive
Plan (incorporated by reference to Exhibit 10.25 of the Annual Report on Form 10-K filed
with the SEC on February 26, 2019).
10.31
Form of Director Indemnification Agreement (incorporated by reference to Exhibit 10.51 of
the Registration Statement on Form S-1 filed with the SEC on January 11, 2010).
10.32
Form of Officer Indemnification Agreement (incorporated by reference to Exhibit 10.52 of the
Registration Statement on Form S-1 filed with the SEC on January 11, 2010).
10.33+
Amended Form of Performance Share Award Agreement pursuant to the 2010 Equity
Incentive Plan (incorporated by reference to Exhibit 10.29 of the Annual Report on Form 10-K
filed with the SEC on February 26, 2019).
10.34+
Generac Holdings Inc. Non-Employee Director Compensation Policy (incorporated by
reference to Exhibit 10.31 of the Annual Report on Form 10-K filed with the SEC on
February 22, 2022).
10.35+
Generac Power Systems, Inc. Executive Change in Control Policy, effective November 5, 2018
(incorporated by reference to Exhibit 10.2 of the Quarterly Report on Form 10-Q filed with the
SEC on November 6, 2018).
10.36+
Generac Holdings Inc. 2019 Equity Incentive Plan (incorporated by reference to Appendix A
to the Definitive Proxy Statement on Schedule 14A of the Company filed with the SEC on
April 26, 2019).
100
Exhibits
Number
Description
10.37+
Form of Restricted Stock Award Agreement pursuant to the Generac Holdings Inc. 2019
Equity Incentive Plan (incorporated by reference to Exhibit 10.1 of the Quarterly Report on
Form 10-Q filed with the SEC on November 5, 2019).
10.38+
Form of Nonqualified Stock Option Award Agreement pursuant to the Generac Holdings Inc.
2019 Equity Incentive Plan (incorporated by reference to Exhibit 10.2 of the Quarterly Report
on Form 10-Q filed with the SEC on November 5, 2019).
10.39+
Form of Performance Share Unit Award Agreement pursuant to the Generac Holdings Inc.
2019 Equity Incentive Plan (incorporated by reference to Exhibit 10.3 of the Quarterly Report
on Form 10-Q filed with the SEC on November 5, 2019).
10.40+
Amended Form of Restricted Stock Award Agreement pursuant to the Generac Holdings Inc.
2019 Equity Incentive Plan (incorporated by reference to Exhibit 10.39 of the Annual report on
Form 10-K filed with the SEC on February 21, 2024).
10.41+
Amended Form of Nonqualified Stock Option Award Agreement pursuant to the Generac
Holdings Inc. 2019 Equity Incentive Plan (incorporated by reference to Exhibit 10.40 of the
Annual Report on Form 10-K filed with the SEC on February 21, 2024).
10.42+
Amended Form of Performance Share Unit Award Agreement pursuant to the Generac
Holdings Inc. 2019 Equity Incentive Plan (incorporated by reference to Exhibit 10.41 of the
Annual Report on Form 10-K filed with the SEC on February 21, 2024).
10.43+
Amended and Restated 2019 Equity Incentive Plan (incorporated by reference to Appendix A
to the Definitive Proxy Statement on Schedule 14A of the Company filed with the SEC on
April 29, 2024).
10.44+*
Amended Form of Restricted Stock Award Agreement pursuant to the Generac Holdings Inc.
2019 Equity Incentive Plan
10.45+*
Amended Form of Nonqualified Stock Option Award Agreement pursuant to the Generac
Holdings Inc. 2019 Equity Incentive Plan
10.46+*
Amended Form of Performance Share Unit Award Agreement pursuant to the Generac
Holdings Inc. 2019 Equity Incentive Plan
19*
Generac Holdings, Inc. Insider Trading Policy
21.1*
List of Subsidiaries of Generac Holdings Inc.
23.1*
Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm.
31.1*
Certification of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a)
and 15d-14(a), pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*
Certification of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a)
and 15d-14(a), pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted by
Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted by
Section 906 of the Sarbanes-Oxley Act of 2002.
97
Generac Holdings, Inc. Mandatory Restatement Compensation Recovery Policy (incorporated
by reference to Exhibit 97 of the Annual Report on Form 10-K filed with the SEC on
February 21, 2024).
101
Exhibits
Number
Description
101*
The following financial information from the Company’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2024, filed with the SEC on February 19, 2025, formatted in
Inline eXtensible Business Reporting Language (iXBRL): (i) Consolidated Balance Sheets as of
December 31, 2024 and December 31, 2023; (ii) Consolidated Statements of Comprehensive
Income for the Fiscal Years Ended December 31, 2024, December 31, 2023 and December 31,
2022; (iii) Consolidated Statements of Stockholders’ Equity for the Fiscal Years Ended
December 31, 2024, December 31, 2023 and December 31, 2022; (iv) Consolidated Statements
of Cash Flows for the Fiscal Years Ended December 31, 2024, December 31, 2023 and
December 31, 2022; (v) Notes to Consolidated Financial Statements.
104
Cover Page Interactive Data File (embedded within the Inline XBRL and contained in
Exhibit 101)
*
Filed herewith.
**
Furnished herewith.
+
Indicates management contract or compensatory plan or arrangement.
Item 16.
Form 10-K Summary
None.
102
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
GENERAC HOLDINGS INC.
By:
/s/ AARON JAGDFELD
Aaron Jagdfeld
Chairman, President and Chief Executive Officer
Dated: February 19, 2025
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed
below by the following persons and on behalf of the Registrant in the capacities and on the dates indicated.
Signature
Title
Date
/s/ AARON JAGDFELD
Aaron Jagdfeld
Chairman, President and Chief Executive
Officer
February 19, 2025
/s/ YORK A. RAGEN
York A. Ragen
Chief Financial Officer and Chief
Accounting Officer
February 19, 2025
/s/ BENNETT MORGAN
Bennett Morgan
Lead Director
February 19, 2025
/s/ MARCIA J. AVEDON
Marcia J. Avedon
Director
February 19, 2025
/s/ JOHN D. BOWLIN
John D. Bowlin
Director
February 19, 2025
/s/ ROBERT D. DIXON
Robert D. Dixon
Director
February 19, 2025
/s/ WILLIAM JENKINS
William Jenkins
Director
February 19, 2025
/s/ ANDREW G. LAMPEREUR
Andrew G. Lampereur
Director
February 19, 2025
/s/ NAM TRAN NGUYEN
Nam Tran Nguyen
Director
February 19, 2025
/s/ DAVID A. RAMON
David A. Ramon
Director
February 19, 2025
/s/ KATHRYN BOHL
Kathryn Bohl
Director
February 19, 2025
/s/ DOMINICK ZARCONE
Dominick Zarcone
Director
February 19, 2025
103
(This page has been left blank intentionally.)
FORWARD-LOOKING
STATEMENTS
This annual report contains
forward-looking statements
that are subject to risks and
uncertainties. For important
information about our use of
forward-looking statements and
limitations thereof, please see
Part I of our Annual Report on
Form 10-K for the year ended
December 31, 2024, which is
included with this annual report.
GENERAC HOLDINGS INC. -
SHAREHOLDER INFORMATION
ANNUAL MEETING
The 2025 annual meeting
of stockholders of Generac
Holdings Inc. will be held on
Thursday, June 12, 2025,
at 9:00 a.m. central time, at
Generac’s corporate office.
CORPORATE OFFICE
Generac Holdings Inc.
S45 W29290 Hwy. 59
Waukesha, WI 53189
262-544-4811
www.generac.com
TRANSFER AGENT AND REGISTRAR
Computershare, Inc.
P.O. Box 43006
Providence, RI 02940-3006
United States of America
Toll Free: 1-877-373-6374
United States: 1-800-962-4284
https://www-us.computershare.com/
investor/Contact
www.computershare.com/investor
INVESTOR RELATIONS CONTACT
Kris Rosemann
Director – Corporate Development & Investor
Relations
Generac Holdings Inc.
S45 W29290 Hwy. 59
Waukesha, WI 53189
262-506-6064
investorrelations@generac.com
INDEPENDENT AUDITORS
Deloitte & Touche LLP
777 E. Wisconsin Avenue, Floor 34
Milwaukee, WI 53202
FORM 10-K
Our annual report on Form 10-K was filed with
the Securities and Exchange Commission and
is available online, or upon written request to
Generac Holdings Inc. Investor Relations.
STOCK EXCHANGE
Generac Holdings Inc. common stock is listed
on the New York Stock Exchange under the
ticker symbol GNRC.
EXECUTIVE OFFICERS
Aaron P. Jagdfeld – 30 years of service
President, Chief Executive Officer and Chairman
York A. Ragen – 19 years of service
Chief Financial Officer
Erik Wilde – 9 years of service
President, Domestic C&I
Raj Kanuru – 12 years of service
Executive Vice President, General Counsel & Secretary
Norman Taffe – 3 years of service
President, Energy Technology
Kyle Raabe – 13 years of service
President, Consumer Power
GENERAC HOLDINGS INC. - BOARD OF DIRECTORS
Marcia J. Avedon, Ph.D. (2) (3)
Chief Executive Officer
Avedon Advisory, LLC
Director since 2019
John D. Bowlin (2)
Former President and Chief Executive Officer,
Miller Brewing Company
Director since 2006
Robert D. Dixon (1) (3)
Former Chairman and Chief Executive Officer,
Natural Systems Utilities LLC
Director since 2012
Aaron P. Jagdfeld (4)
President and Chief Executive Officer
Generac Holdings Inc.
Director since 2006
William D. Jenkins, Jr. (2)
President
Palo Alto Networks
Director since 2017
Andrew G. Lampereur (1)
Former Executive Vice President and Chief
Financial Officer, Enerpac Tool Group
(previously Actuant Corporation)
Director since 2014
Bennett J. Morgan (2) (3) (5)
Former President and Chief Operating Officer,
Polaris Industries Inc.
Director since 2013
Nam T. Nguyen (3)
Chief Operating Officer
Generate Capital
Director since 2022
David A. Ramon (1) (3)
Managing Partner
Vaduz Partners
Director since 2010
Kathryn V. Roedel (1) (3)
Former Executive Vice President and Chief
Services and Fulfillment Officer, Sleep Number
Corporation (previously Select Comfort Corp.)
Director since 2016
Dominick P. Zarcone (1) (2)
Former President and Chief Executive Officer
LKQ Corporation
Director since 2017
(1) Member of Audit Committee
(2) Member of Human Capital and
Compensation Committee
(3) Member of Nominating and Corporate
Governance Committee
(4) Executive Chairman
(5) Lead Director
Generac Holdings Inc.
S45 W29290 Hwy. 59
Waukesha, WI 53189
1-888-GENERAC (1-888-436-3722)
©2025 Generac Holdings Inc. All rights reserved.